Forex Support And Resistance Strategy

Support and Resistance Forex trading strategy — is a widely used trading system based on the horizontal levels of support and resistance. These levels are formed by the candlesticks' highs and lows. A break-through of these levels after a flow of consolidation gives a signal for a trend. This strategy doesn't crave whatever chart indicators except for the ability to draw lines (at least imaginary).

Features

• Well-divers low end-loss.
• Relatively high success rate.
• Unclear target levels.

How to Merchandise?

1. Support level is formed by the lows of two or more candlestick bars that form a rather direct horizontal line with no lower lows between them.
2. Resistance level is formed by the highs of two or more candlestick bars that form a rather direct horizontal line with no college highs between them.
3. Consolidation is a menses without any trend, forming well-nigh back up or resistance level, with the relatively small-scale candlestick bodies.
4. A close below the support level signals a brusque position.
5. A shut to a higher place the resistance level signals a long position.
6. Stop-loss is set up to the low of the previous candlestick (for the long positions) or to the loftier of the previous candlestick (for the short positions).
7. Accept-turn a profit can exist set relatively to the end-loss or every bit a trailing stop of some sort.

Example

Support set-up:

Resistance prepare-upwardly:

A period of consolidation is clearly seen on both example charts. In both cases the support/resistance level is formed by two candles on a rather curt menstruum. Stop-loss is placed close to the entry level. Take-profit couldn't be clearly set at the position entry moment, but a take a chance/reward ratio of non less than 1:ii could be used hands. If y'all are having trouble detecting support and resistance levels on the nautical chart you tin apply our free MT4/MT5 indicators for that: Support and Resistance or TzPivots.

Warning!

Use this strategy at your own risk. EarnForex.com can't exist responsible for any losses associated with using whatever strategy presented on the site. It's not recommended to use this strategy on the existent account without testing information technology on demo first.

Discussion:

Do you take any suggestions or questions regarding this strategy? You can always discuss Support and Resistance Strategy with the young man Forex traders on the Trading Systems and Strategies forum.

Forex trading bears intrinsic risks of loss. Yous must sympathize that Forex trading, while potentially profitable, can make you lose your money. Never trade with the money that y'all cannot afford to lose! Trading with leverage can wipe your business relationship even faster.

CFDs are leveraged products and as such loses may exist more than the initial invested capital. Trading in CFDs carry a high level of adventure thus may not exist advisable for all investors.

Source: https://www.earnforex.com/forex-strategy/support-resistance-strategy/

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