Forex4noobs support and resistance
Doing so in an effective way is vital to your success as a price action trader. Placing SR should be a simple process that takes up only a little of your time. Agonizing over the placement of SR can be a time sink and often leads to over thinking. When it comes to SR, the most obvious areas will be the most powerful. This is because a large portion of traders will also see these levels and react to them.
So any obscure or minor SR you place and then look to trade from can actually cause more lost trades. I have condensed the process of placing SR areas into three easy to follow steps that will help you streamline your time spent as well as finding the most powerful support and resistance. I strongly recommend heading over to in the live session for my detailed run down of these steps. Reading how to do something is often far different to physically doing it.
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You can always check your SR against my own SR. Now, as much as placing SR areas is easy there are times where price can get pretty messy. Want to join? Log in or sign up in seconds. Submit new content. Get an ad-free experience with special benefits, and directly support Reddit. No posts promoting your 3rd party trader group or chatroom.
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Empty charts without annotations are useless. Subjective reasons for a trade do not help others learn or understand what you are doing. There are a plethora of subs devoted crypto topics. We are not one of them. This sub deals with fiat currencies backed by governments. Even if your forex broker offers Crypto CFDs, it is still considered off-topic here.
When is the weekend? How can you trade efficiently using a chart like this? You can't, it is too messy. The core rule of my price action strategy is to keep trading simple. I use these support and resistance areas in conjunction with candlestick analysis to trade Forex. So what does a clean Forex chart look like? Much better than the monstrosity above! This chart is uncluttered, easy to understand and to navigate, with nothing to distract you from analysing price action.
The NickB Method - Support & Resistance Lines com
This style of trading is quick, efficient, stress-free, and you can do it from anywhere, including your smartphone. Placing support and resistance areas is the most important skill you can master in trading. Support and resistance areas divide your chart up into buy and sell areas. An area that sits above current price is a sell area, any area below current price is a buy areas. Support is a buy area as buyers are found at support. Resistance is a sell area as sellers are found at resistance.
This is a strong resistance sell area. When price approaches a sell area large amounts of sell orders are triggered countering buy orders. This usually results in price stalling or even turning around completely for a reversal. Why does this happen though? It's simple, the market movers like banks and hedge funds place their orders at areas of support and resistance. Good traders don't randomly place entry orders and hope that they get lucky.
They place their entry orders at significant price levels.
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Significant levels come in many forms. The next time it approaches the level it pulls back again and then again two more times yellow highlights. Because market movers place their buy orders at the 1. This happens all the time on every Forex pair and in every financial market for that matter.
This is how markets work, buy and sell orders are grouped together in the same general area and when they are hit we see the impact on price. I have tried them all and I do not find them reliable. Support and resistance placements still need to be done by a person.
But don't worry, it is easy, all you are doing is placing horizontal lines when you spot an area with two or more bounces. I am going to break it down into a step by step process for you though. But first, we need to define some rules for support and resistance areas. Three Rules to Support and Resistance There are three key rules you need to keep in mind when placing support and resistance areas.
Place areas on the body of a candle, the body is more important than the wick. The more recent the bounce the more important. Prioritise recent bounces over older bounces. You need at least two connecting bounces to place a support and resistance area. Remember, place your areas at the bodies, not the wicks and as these are yearly highs and lows placing them based on a single bounce is enough.
You will generally find that there are support and resistance areas on most charts. If you have more than 8 you probably placed too many. But most of what they learn is completely useless!
Well the standard approach to candlestick analysis is basic pattern recognition, which fails to work in real trading. I delve much deeper than that, I look at the story behind the candle and in this chapter I will show you how to do that too. But what they learn is usually useless. Each pattern has a set in stone definition and that is the only meaning it can have.
And for a price action trader, it is useless. Actually, it is worse than useless. Thinking about candles as just patterns is counterproductive. It makes you a worse trader, it leads you to make massive mistakes. Giving a pattern a set definition leads to tunnel vision. When you see that specific pattern, you assume that something will happen. But that is not how candlesticks work. All candlesticks need to be assessed based on the candlesticks around them, and many other factors.
Below is a candlestick pattern commonly called a "spinning top". Normally people say that a spinning top means a reversal is imminent, which can be true.
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However, this same pattern can also mean that a continuation is imminent. It can mean that price is temporarily stalling. It can mean a lot of different things. Thinking of candles as simple patterns is the wrong way to do things. You need to look beyond the pattern and read the story of price.
When you combine those candles together, you get the story of price. Reading and understanding the story of price is vital in Forex. It is vital because it allows you to answer one of the most important questions in trading… Who is in control of price? This question has three possible answers: buyers, sellers, or neither. Being able to accurately answer this question is vital.