The Wash and Rinse To See True Support/Resistance

True support and resistance are found in the meat of the move, not at the extreme highs and lows. To find it, simply draw a zone or box, look for the place that price touches the most, and then pay attention to what happens afterward.

In this lesson, I show how a Wash and Rinse structure at the pivot of a swing uses the most touches to find true support in a market.

The Wash and Rinse have a process that we can follow in real-time.

1. Multi-Pivot Line (MPL)
2. Zoom through the MPL
3. Come back and retest the MPL
4. Zoom back through the MPL the other way

What happens in this process, is that buyers are holding some level. Price then busts that level triggering stops and at the same time encouraging shorts to enter. Then the price rips back up essentially cleaning the book of orders and showing where the true support is (at least for the time being).

Once you recognize this structure, you can begin making your own observations and use these levels to read a market or build a setup around it. The most important part is to learn to design a plan with objective rules around what you observe.


What Is A Trading Setup?

A trading setup is a set of conditions that come together in a particular way, indicating a probability of one thing happening over another. It’s like a weather event that happens when certain conditions come together in the atmosphere. First, we must define the conditions within price flow so that we can recognize them coming together and follow their process. The conditions we will use will be 2 of the market structure components that make up a swing. In this video, you will learn about the gap impulse and the shelf and how we can lean on it after certain conditions are met.