우리는 모두 지지와 저항이 거래의 기본 개념 중 두 가지라는 사실을 알고 있으며 가장 중요하고 매우 중요한 개념 중 이 두 가지에 대해 배워야 합니다.
성공적인 거래를 위한 이 두 가지 개념의 사용에 대해 모든 사람이 서로 다른 개념을 가지고 있다는 사실은 매우 이상합니다 . 따라서 이 두 가지 개념을 가장 잘 이해할 수 있도록 완전한 안내서를 작성했습니다. 이 가이드를 읽고 이해하면 이 두 가지 개념을 사용하여 성공적인 거래자가 될 수 있습니다.
Firstly, look at the chart to grab the basic concept. You can easily witness that the zigzag pattern is going in an upward direction indicating a bull market. In simple words, resistance indicates the position where market is full or even abundant of sellers as compared to buyers. As the chart depicts the price moves in an upward direction and then comes back. The highest point reached just before it pulls back is called resistance.
On the other hand, prices start to go up again, and before turning the direction the lowest point reached just before the turn is termed as support. In other words, support indicates the market situation where you would be able to see surplus buyers into the market as compared to the sellers.
We have made it even simpler just for a better understanding of the support and resistance concept.
Support level is position where price tries to find the support to take surge into the market as continue to fall. There is a strong chance fro the price that it takes the bounce from this level instead of break through. Moreover, price would start declining again until it finds a new support level.
As the name suggests that resistance level is just reciprocal for the support level. Basically, it is a position where price faces resistance while keeps increasing. So, again this time price is most likely to bounce back instead of breaking through it. Usually, the price keeps increasing until it finds a resistance level again.
So, movement of the price in up and down direction makes the support and resistance levels into the market. These levels are used by the trader to make the trading decisions.
Good Understanding means Good Trade
The proper understanding and interpretation of these support and resistance levels is a key to success. If a trader knows how to use and when to use these levels for making the entry and exit decisions, he is taking an edge over the other traders into the market. Consequently, traders would be able to take the maximum benefit out of the situations into the market.
Go For the Bounce for Trading Decisions
There are two simple rules to understand and keep in your mind when interpreting the support and resistance levels. These two rules are as under,
- But when price starts declining towards the support
- Sell when price starts increasing towards the resistance
Go for the Break
Similar to the taking benefits out of the Bounce, there are two simple rules for making trade decisions when it comes about the break. Those two rules are given as,
- Buy when the price breaks through the resistance
- Sell when the price breaks through the support
We are going to explain these concepts in even more simpler and detailed manner jut for your better understanding.
Reactive and Proactive Support and Resistance Levels
Proactive support and resistance techniques are “prescient” in that they regularly plot areas where cost has not really been. They depend on current price action through investigation, has been demonstrated to be prescient of future price action. Proactive support and resistance techniques incorporate Measured Moves. Reactive support and resistance are the inverse: they are framed straightforwardly because of price activity or volume activity. They incorporate Volume Profile, Price Swing lows/highs, starting price, Open Gaps, certain Candle Patterns etc. A value histogram is supporting in appearing at what value a market has invested more relative energy.
How to Plot Support and Resistance Levels
It is very important to keep in your mind that support and resistance levels are not whole number and it all depends your ability how better you understand these levels and how to use them. Mostly, you would witness the broken support and resistance levels and you will learn that market was just testing them. These tests of support and resistance are usually represented by the candlestick shadows.
Notice how the Shadows of the candles break past support but end up closing above it
Here you can easily witness how shadows of the candles tested the 1.4700 support levels. At this position, it appears to be breaking the support into the market. But if you cast a closer look, you would be able to learn that market was just testing it. So, what is the way of finding what is exact of knowing the support and resistance levels are broken or not? Unfortunately, there you would not find out the precise answer to this question and you will see some people arguing that the support or resistance level is broken if the market can actually close past that level. However, you will find that this case is not true always. Now we will see some of the examples from above and will look at what happened when the price closes closed past the 1.4700 support level. In this case, the price had closed below the 1.4700 support level. However, it ended up increasing back up above it. Just look at the chart now, you can easily witness and can understand that the support was not actually broken. It is still very much intact and now stronger as compared to ever before.
Price closed below 1.4700 support but eventually rose above it
Support and Resistance are Zones Not Whole Numbers
You will find these zones are to draw support and resistance on a line chart instead of a candlestick pattern chart.
The only reason behind this is that line charts show you the closing price only when candlesticks are added to the extreme highs and lows to the chart. However, these highs and lows may mislead and misguide you because they are just the “knee-jerk” reactions to the market.
Look For the Intentional Moves Instead of Reflexes
You must look for plotting your support and resistance lines around areas where you can see the price forming several peaks.
Other Interesting Facts
Here are some other interesting tidbits fro you to keep in your mind.
- Most probably resistance becomes the support when price passes through the resistance.
- Usually, prices test the level of resistance or support without breaking it.
- The strength of the move depends on how strongly the broken support or resistance had been holding upon the breaking of support or resistance level.
- You must do maximum practice, by doing so you would be able to spot the possible support and resistance areas easily in an effective manner.
How to Locate the Support and Resistance Levels Effectively
You can use the trend lines for the identification of support and resistance levels. However, some of the traders believe that pivot point calculations are best to use for the identification of the support and resistance areas. This thing is to keep in mind that the more significance is given to that specific level when more support/resistance level is “tested”. A price breaks past a support level, that support level often forms a new resistance level. Similarly, vice versa is true as well. Most of the times if the price breaks through a resistance level it will form support at that level. It is worth mentioning that Support and Resistance levels form very vital and important part of a technical analysis through which a trader can achieve success. When the price reaches a value ending in 50 or 00, most of the traders see these levels as a strong potential for intervention in the present movement. The price may cut the line and go in the reverse direction. It may move around the level as the Bulls and Bears fought for victory. Ideally, a successful trader should exercise caution while selecting 00 levels, and 50 levels especially when it has acted as Support or Resistance in past.
Use Support and Resistance Levels for Success
We are going to discuss an example of support switching roles with resistance and the opposite. A basic investment strategy used by traders is to buy a stock at support and sell at resistance if a stock price is fluctuating between support and resistance levels. They try to cover the short at support as the example mentioned below.
When you are trying to identify the best time for entry and exit investment with the support of support or resistance levels. It is vitally important to select a chart based on a price interval period that is suitable for a time bracket of your trading strategy. Short term traders are inclined to use charts consisting of interval periods, such as 1 minute. Long-term traders mostly use price charts that are based on hourly, daily, weekly, or monthly interval periods. Usually, when traders are trying to find the time for investing they use short-term interval charts. Early signals that the stock is coming out from the downtrend are when it starts to generate support at $30.48 and then starts to generate higher highs and higher lows. This signal depicts a change in trend from negative to positive.
Best Way to Draw Support and Resistance Zones Step By Step
The crux of our all above discussion and detail is that support and resistance zones are the best tools to identify the level at which there is a high probability of a reversal of currency’s trade rate. This is the main feature to incorporate into your trading strategy. However, there is a problem that these are zones, not concrete numbers so a trader can usually only approximate those supports or resistances.
I started doing research on “how to draw support and resistance effectively”. I had gone through a number of articles. Moreover, I even bought a course on the topic to learn the skill at its best. I found the best available advice on drawing the right zones to be in detail. It doesn’t work for me. So, I read about using a line chart to draw the proper zones at first in detail. However, this time it worked for me.
I actually discovered this approach to be somewhat hard to execute. It is difficult to recognize the solid from the solid support and resistance zones. Gradually, I thought of an alternate method to recognize the zones. I understood that this new way decreased disarray a great deal. If that wasn’t already enough, it additionally gives a much more clear image of how the market carries on.
Draw Support and Resistance Zones in A Powerful Way
Here I am going to write down my strategy step by step. This is the best technique I found to draw the support and resistance areas.
1. Select the Best Chart
This first step is truly basic and should not be ignored. The solitary thing you need to do is to open any chart and pick the type of chart you like. I go through candles yet it’s to you to utilize anything you found suitable. Do it now! Reading may be is exhausting but I need you to apply!
2. Differentiate all swing highs and lows
이 시점에서 차트에 표시되는 모든 최고점과 최저점을 구별해야 합니다. 이전을 봐야 할 수도 있습니다. 차트에서 볼 수 있는 각 상단과 하단에 선을 두어야 합니다. 다음과 같아야 합니다. 라인이 완전히 낮을 필요는 없습니다.
여기서 중요한 것은 모든 저점과 고점에서 직선을 그리는 것입니다. 자발적이어서는 안됩니다. 이 개발의 놀라운 부분은 당신이 최고점과 최저점을 볼 수 있기 때문에 시장이 패턴에 있는지 여부를 효과적으로 결정할 수 있는 옵션이 있다는 것입니다. 차트 위에 있는 것이 분명합니다. 시장은 지금 패턴 이 아닙니다 .
3. Add lines to interface the highs/lows
The last step in drawing support and resistance zones comprises connecting the highs and lows you related to even lines. Those will turn into your principle supporting and resistance zones. However, there is practically no chance that the lines you draw will lay precisely on the highs and lows you found. Don’t worry that is absolutely common. At whatever point you believe you can locate 2 highs/lows, add a level line. When you have finished this cycle, you are confident that the lines are clear to identify the support and resistance zones. You can generally change your lines, yet it shouldn’t be essential.
두 경우 모두 주관적인 느낌으로 선이 그려집니다. 꺾은선형 차트에 하나의 추가 선이 있는 것을 볼 수 있습니다. 나는 일을 똑바로 유지하고 싶습니다. 나는 단지 1차 지지대와 저항대를 찾는다.
Here are Some Key Points
Understand that this technique works extraordinary for any period you choose. However, make it sure that the zones you distinguish are interfacing 2+ highs or lows.
Now Recap the Rules
You may state that this cycle gives a similar outcome as identifying the support and resistance zones through a line chart. So, it is concluded and I discover this cycle to be less complex and it differentiates the pattern. Finally, whatever the cycle you select to identify the support and resistance zones on your chart just make it sure that you are happy with it.
Now Draw Support and Resistance Levels like a Pro
Inevitably, each and every specialized put together trading strategy will depend with respect to you – the expert Forex trader, being able to effectively draw support and resistance levels on your value strategies. Delineating your levels will be the main center ability for any genuine trader. In the event that you experience difficulty showing your S/R levels precisely, at that point your trading, in general, may collapse… savagely. What is based on a powerless establishment will at last dis-integrate? Everybody will have a somewhat unique way to deal with getting their charts drawn, yet it is the final product which tallies. I’ve seen some platforms posting up their assessments of help and resistance levels so you can simply check in every once in a while, clone those flat value levels on to your chart, and not need to consider the cycle by any stretch of the imagination. This isn’t the correct approach to turning into an authentic trader.
When you become familiar with the simple cycle of drawing out value levels, you won’t require anybody to supply you theirs. Consider everything along these lines; it’s truly similar to undermining a test – you could be replicating some unacceptable answers, you don’t pick up anything, and won’t develop as a trader.
On the off chance that you learning this, at that point, you presumably don’t need a free lunch’ and have the hunger for information with an objective to improve your own chart understanding abilities. Generate great skills early and they will stay with you until the end of time. I am confident that you need to have the option to autonomously and read a value chart – in case you’re simply piggy easing off of another person’s conclusions, you will never genuinely arrive at your destination. So today, I will show you the cycles I use to plot support and resistance.
You have no need to bother with any extravagant tools – simply your own eyes to examine the value charts. It will be a significant deciding variable in how fruitful you are as a trader! In this instructional exercise, I will slice through the disarray, and make you familiar with the incredible fundamentals of drawing support and resistance.
Stop Making Support and Resistance A Complex Task
나는 이러한 전략들 하나하나가 토론에 게시되는 것을 보았고, 그것들은 마치 젊은이의 핑거 페인팅 그림이나 우주 임무를 위한 NASA 제어 보드처럼 보입니다. 이것은 거래자에게 힘들고 어려운 일이며 가치 전략을 ‘읽는’ 능력을 진정으로 망치고 있습니다. 대부분의 사람들은 주인이 되는 것이 동료들보다 심각한 우위를 점한다는 사실을 진심으로 받아들입니다. 이러한 사고 방식으로 거래자들은 생각할 수 있는 각각의 전문화된 필수 항목을 다루고 ‘레이더에 의해 잠입’되는 것이 없도록 할 것이라는 기대를 가지고 진정으로 한계를 뛰어 넘을 것입니다.
거래의 발판을 마련하기 위해 가장 좋은 출발점은 몇 가지 중요한 수준이 구분된 완벽한 가치 차트로 시작하는 것임을 진심으로 인정합니다. 가치 활동 및 S/R 수준을 활용하는 차트를 정독 할 수 있으면 사용하기로 선택한 시스템에 관계없이 거래가 향상됩니다.
Look at the chart mode. It’s an exemplary illustration of a Forex trader who takes things excessively far! This trader has an established environment that isn’t down to earth and just too hard to even consider working with. There is definitely no compelling reason to over examine this way – its extraordinary needless excess. On the off chance that your chart looks anything like this – you can fix this correct now as a positive advance towards better trading. In the event that you are working with a Forex chart contaminated with unimportant flat levels, and other superfluous factors like pattern lines, channels, or even a heap of pointers – settling on a certain trading decision will be amazingly baffling. A severely spread out chart is a toxic substance to your trading outlook. It’s difficult to make intelligent, discerning choices from befuddling information. You imperil yourself to falling prey to your feelings. The thought is to be moderate with the charts and the business sectors.
Truth be told, you just need to stamp out the critical levels that are encompassing the current value developments at the given time. At times we will just have 1 line set apart on our strategies – as you may have seen in our Forex market critique. You will discover much of the time it just takes that ‘one all-around checked level’ to obviously chart, and help you unmistakably ‘read the circumstance’ on a value chart. Truly, anything more than 3 lines set apart on the chart would begin to be considered excessively ‘occupied’ and need some tidying up. By just checking out the significant levels to watch you will keep your charts clean, straightforward, and simple to peruse. This gives lucidity back to the chart and to the trader – permitting the recognizable proof of good trade arrangements, and making the expectation of future value developments a lot simpler. Traders slaughter their trading at the very center by ruining their strategies. There is no compelling reason to have a lot of going on, organize your help and resistance levels so just the truly significant ones are checked. This will help keep your chart clean by doing this you take out self-subverting disarray and advance high accuracy trading.
Getting Support and Resistance
Support and resistance levels are demonstrated value territories where purchasers and traders discover some type of balance. We for the most part observe a move yet to be determined of intensity among purchasers and traders happen at these levels – this ‘power move’ creates the exemplary value reverse designs we are consistently watching out for. Accordingly obvious help and resistance levels are the significant defining moments on the lookout. Cost doesn’t move in straight lines as you are no doubt mindful of – rather we see value swinging here and there, making new swing lows, swing highs, or re-testing existing ones. The more regularly cost does this ‘stop and converse’ activity at a particular level – the ‘more grounded’ or more’ critical’ that specific S/R level becomes. Cost is imparting to you that “this value level is being safeguarded forcefully”, and could be a decent territory to search for reverse signals. It’s additionally significant that help and resistance levels that are plainly noticeable on the higher time periods are viewed as more noteworthy in worth, and have an expanded possibility of turning into a value defining moment. Simply recollect; the higher the time span, the rigid the S/R becomes. At the point when we draw our S/R levels – we deal with the everyday time span most of the time.
나는 플레이에서 더 거대하거나 ‘주요’ 수준을 확인하기 위해 주별 및 월별 차트를 활용하도록 처방합니다. 이러한 주별 및 월별 수준은 해고 전등 반전과 유사한 견고한 촛불 반전 디자인을 주시하기에 좋은 영역입니다. 특히 반대 패턴으로 가는 경우에 대비합니다.
Intra-day levels are for the most part not worth stressing over, value slices through these like a hot blade through margarine on an everyday premise and don’t offer a lot of specialized worth.
This is one reason intra-day or ‘day trading’ is significantly more troublesome and has a low achievement rate. You’re certainly trading on an unstable establishment when you ‘sharpen in’, or tune your examination on those lower time periods – it’s not justified, despite the potential benefits.
Support and resistance are even levels the market has utilized in the past as a defining moment on the chart. They can be found on unsurpassed casings, however are best sourced from higher time span charts, for example, the day by day and week by week. The higher you go up the time periods, the more information inside the candles – accordingly the more critical the levels become, and are bound to go about as a defining moment later on.
Working with Support and Resistance in Range-bound Markets
Let’s get somewhat more reasonable and move into some specialized exhibits. Support is a region on the chart where the market exhibits solid purchasing activity, effectively recognizable by cost ‘reaching as far down as possible’ brought about by bearish value activity development being invaded by bullish weight at a steady value flat level on the charts.
Support is frequently alluded to as the ‘floor’ that value ricochets off, or experiences difficulty moving past to the drawback. Resistance is something contrary to help – it’s the place where you see value ‘finishing out’ as the bullish value activity development is devoured by bearish action at reliable value levels on the charts. Resistance is known as the value ‘roof’ that the market will in general tumble off, or experiences issues pushing through to the potential gain. Support and resistance is genuinely easy to comprehend when you take a gander at going business sectors – they make up the significant control lines of reach bound strategies.
At the point when a market is range-bound, the solitary levels you truly need to have set apart out are the upper resistance ‘roof’, and the lower uphold ‘floor’ of the reach. We prescribe to just trade purchase or sell signals from these primary upper and lower limits. Short signals are substantial at range resistance, and long signals are to be focused at the reach uphold. Going business sectors are truly simple to ‘map out’ on your charts. You need to draw your levels so you feature the upper resistance and lower uphold regulation levels. These are the significant defining moments for a reach and merit your consideration. The best trading open doors will shape here. Avoid the center of the reach, it’s a ‘no fly zone’ that generates a ton of awful signals and unpleasant value activity.
Moving business sectors are recognized by utilizing swing designs that are separated into exemplary arrangements higher highs, higher lows, lower highs and lower lows (not in a specific order).
These key specialized high and depressed spots are called ‘swing highs’ and ‘swing lows’, and it is the request which they show up on the chart is essential to distinguishing patterns, particularly on the off chance that you need to get them in their beginning phases of improvement. During a bullish pattern, cost will step upwards in a crisscross sort design – practically like cost is strolling up a stairwell.
Some Advanced Techniques for Support and Resistance Trading Strategy
Evidently, the more testing for support the stronger it gets. Basically, support and resistances are two lines on your chart you selected for a specific period of time. All you need to do is just place your stop loss on your chart.
If you going to believe above mentioned stories you are going to lose money for a longer period of time. This is because these are the biggest lies in support and resistance trading strategies. However, it is not the only mistake because most of the courses and training include this type of stuff for you. But there is no need to be worried about it because we are here for you. After going through these advanced tips, you will not repeat these mistakes while trading in the market.
Rule No. 1 – Support and Resistance becomes Weaker with More time testing
We all are aware of the fact that support is an area on your chart with potential buying pressure. On the other hand resistance is an area on your chart showing selling pressure. You’ve presumably perused trading books that state… the more occasions Support or Resistance is tried, the stronger it becomes. Actually, the more occasions Support or Resistance is tried, the more vulnerable it becomes.
The market turns around at Support in light of the fact that there is a purchasing strain to push the cost higher. The purchasing weight could be from Institutions, banks, or shrewd cash that trades huge requests. On the off chance that the market keeps re-testing Support, these requests will in the long run be filled. Also, when all the requests are filled, who’s left to purchase? Higher lows into Resistance as a rule brings about a breakout (rising triangle). Lower highs into Support generally bring about a breakdown (sliding triangle).
Rule No. 2 – Support and Resistance are regions on your chart (and not lines)
This is an error I’m liable of. Treating Support and Resistance (SR) as lines on my diagram.
Since you’ll confront these two issues:
• Price “undershoot” and you miss the trade
• Price “overshoot” and you expect SR is broken
This happens when the market approaches your SR line, yet too far off. At that point, it inverts once more into the other way. Also, you miss the trade since you were trusting that the market will test your accurate SR level. Value “overshoot” and you accept SR is broken this happens when the market breaks your SR level and you accept that it’s wrecked. Hence, you trade the breakout… however just to understand it’s a Bogus breakout. Things being what they are, how would you tackle these two issues? Treat Support and Resistance as regions on your outline, not lines.
Why SR is zones on your chart?
On account of these two gathering of traders.
1. Traders with the dread of passing up a great opportunity (FOMO)
2. Traders who need to get the most ideal value (Cheapo)
Allow me to clarify that traders with the dread of passing up a great opportunity would enter their trades the second value approaches Support. Also, if there’s sufficient purchasing pressure, the market would switch at that area.
Then again, there are traders who need to get the most ideal cost, so they place orders at the low of Support. Furthermore, if enough brokers do it, the market will turn around close to the lows of Support. In any case, consider that you’ve no thought which gathering of brokers will be in charge. Regardless of whether it’s FOMO or Cheapo traders. Subsequently, Support and Resistance are zones on your diagram, not lines. On the off chance that you need to know my mystery procedure to draw.
Rule No. 3 – Support and Resistance can be dynamic
What you’ve discovered before is level SR (where the territories are fixed). However, it can likewise change after some time, also called Dynamic Support and Resistance. There are two different ways to recognize Dynamic SR.
You can use:
1. Moving normal
Step by step instructions to utilize the moving normal to distinguish dynamic SR I utilize the 20 and 50 MA to distinguish my Dynamic SR.
Be that as it may, it’s not by any means the only way. You can utilize 100 or 200 MA, and it turns out great. At last, you should discover something that suits you (and not aimlessly follow another merchant).
These are corner to corner lines on your outline to recognize dynamic SR. This is what I mean: Treat Support and Resistance as regions on your diagram (and not lines). This applies to both level and dynamic SR.
Rule No. 4 – Support and Resistance are the most exceedingly terrible spots to put your stop badluck
I need not be an Einstein to think about where you’ll put your stops. Underneath Support or more Resistance, correct? Also, for what reason is this most exceedingly terrible spot to put your stops? So… how would you maintain a strategic distance from it? All things considered, you can’t keep away from it totally. Yet, here are two things you can do…
• Set your prevent misfortune a separation from SR
• Wait for the light to close past SR
Set your prevent misfortune a separation from SR You can do this by utilizing the Average True Range (ATR) marker. Here’s the manner by which to do it:
1. Identify the low of Support
2. Find the ATR esteem
3. Take the low of helpless the ATR esteem
In the event that you need to find out more, go watch this preparation video underneath: Trust that the light will close past SR. Here are the means by which it works. You possibly leave your trade if the value closes underneath the low of help or the high of the resistance.
What’s more, here’s something fascinating… do you know the “genuine move” for the most part happens after traders get halted out of their trades?
Furthermore, you can exploit this situation by utilizing a trading methodology I’ll impart to you later.
Rule No. 5 – Trading at Support or Resistance gives you positive danger to compensate
Entering trades when the cost is far away from SR. This requires an enormous stop misfortune and offers you a helpless danger to compensate. Yet, on the off chance that you let value come to you, at that point you’ll have a tighter stop misfortune, and this improves your danger to remunerate. Tolerance pays in trading. Quit pursuing the business sectors and let value come to you. Imprint out your SR zones ahead of time. At that point search for trading openings when the cost has gone to your levels. On the off chance that the cost is somewhere else, remain out. On the off chance that you need to find out more, Instructions to tell when Support or Resistance will break — so you don’t get “caught”
• Support will in general break in a downtrend
• Resistance will in general break in an upturn
• Support and Resistance will in general break when there’s development
Resistance will in a general break in an upturn. For an upswing to proceed, it needs to reliably break new highs. Hence, shorting at resistance is a low likelihood of trade. All things considered, going long at Support is a superior trade. Backing will in a general break in a downtrend for a downtrend to proceed; it needs to reliably break new lows.
In this manner, going long at help is anything but a smart thought. However, going short at Resistance is an extraordinary thought. Backing and Resistance will in general break when there’s development Backing is a region with potential purchasing pressure. Anyway, the cost should climb rapidly, correct? Presently… imagine a scenario in which cost didn’t go up and all things considered, combine at Support.
The more occasions Support or Resistance (SR) is tried, the more fragile it becomes. So it’s an indication of the shortcoming as the bulls couldn’t push the cost higher. Maybe there’s no purchasing weight or, there’s solid selling pressure. In any case, it doesn’t search useful for the bulls and Support is probably going to break. A Support and Resistance trading technique that allows you to benefit from losing dealers Backing and Resistance draws in a ton of consideration from dealers. There will be some hoping to trade the inversion, and others hoping to trade the breakout. Since trading is a lose-lose situation… for inversion traders to benefit — breakout brokers should lose. What’s more, for breakout brokers to benefit — inversion traders should lose.
This is what you need to do:
1. Mark your territories of Support and Resistance (SR)
2. Wait for a directional move into SR
3. Wait for value dismissal at SR
4. Enter on the following flame with stop misfortune past the swing high/low
5. Take benefits at the swing high/low
Here i am going to explain step by step
- Identify the Area of Your Support and Resistance
2. Keep Waiting for a directional move into SR
3. Keep Waiting When price starts rejection at SR
4. Make Your Entry on the next candle with stop loss beyond the swing high/low
5 Have Your profits at reaching swing high/low
You should comprehend this trading system isn’t the “sacred goal”. There are times you’ll lose to breakout traders — and on occasion, breakout brokers will lose to you. The lone way you will make due over the long haul is a legitimate danger to the board. Hence, I propose gambling, not over 1% of your record on each trade.
Few Of the Support and Resistance trading examples
Losing set-up at (GBP/NZD) as shown below
Winning set-up at (SOYBNUSD) as shown below
Winning set-up at (WTICOUSD) as shown below
Most Frequent Questions Traders Used To Ask
Q. #1: How we can define how wide the Support and Resistance can be?
A short way of finding the answer to this question is that Average True Range (ATR) value as a gauge.
- Search for the present value of ATR
- Addition of 1.5 up to 2 times of searched ATR value into your Support level
Consequently, this will form an area of support and you are able to find the method of gauging how wide the Support and Resistance are is. A more specific technique is to look how price behaves at the support and resistance areas.
For example, either price goes into the support and then proceeded to deeply into the support and got rejected. I will pick two of the levels and will draw the support and will measure how wide it should be.
Q. #3: When you mention buildup, do you mean an accumulation?
It’s quite difficult to identify Support and Resistance but not the swing high/low. Basically, a buildup is a tough consolidation where the candles start to overlap one another. However, an consolidation is a range market, where its highs and lows can be easily loated and the market is swinging up and down within the range.
Q. #3: Is it important for price to break Support and Resistance with high volume?
As per my opinion, the volume does not play a vital role in determining whether a breakout is real or not. This is because; I’ve found that volume doesn’t play a huge part in a breakout.
Here is what we have concluded that the more times Support and Resistance is tested, the weaker it becomes. Support and Resistance are not the hard and fast lines but areas on the chart. You can use the moving averages to identify the support and resistance areas on the chart. There is no point in keeping you stop loss just beneath the support or above the resistance. You have to keep yourself updated with support and resistance techniques to become a successful trader. Last but not least, you get the favorable risk to reward while trading using support and resistance.