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Trading Support And Resistance Areas In Forex: The Ultimate Guide

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For as long as I can remember, I’ve been using a form of support and resistance areas in my trading. Those areas can be very useful in finding points at which the market is likely to reverse.

It is not a guarantee! But it allows a trader to find high probability trading opportunities.

In this video, I share my ultimate guide on how to trade support and resistance areas in the Forex market.

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Step 1: Identifying Support And Resistance Areas

Using TradingView, I discovered a technical indicator named “Pivot Point High Low”. It displays high and low points on the chart and makes it easier to draw support and resistance areas.

Read: A Powerful Way To Draw Support And Resistance Zones

From there, I typically draw lines linking the highs and lows at the same price points. Those will become our support and resistance areas.

I recommend you perform your support and resistance analysis on a higher time frame such as the daily or weekly charts. I will use round numbers (i.e. 1.0500, 108.00, 1.2500, etc.) to place my lines. It makes it easier for me to remember key levels.

Step 2: Add Boxes To Transform Your Lines Into Areas

Since support and resistance in any market are zones/areas, I do not want to keep a single line on my chart. Having only one line that identifies a round number makes it hard to identify when the price has passed the area.

Trading Support And Resistance Areas Example
It makes more sense to identify S/R areas with boxes as opposed to lines. However, I still use lines to identify my main level.

Step 3: Pay Close Attention To Pairs Reaching S/R Areas

This last step is very important. You could identify all the support and resistance areas in the world, but if you miss your trade setups, you won’t grow your trading account!

To ensure that I don’t miss any setups, I review the daily charts of the 10-15 currency pairs that I follow every morning. I pay close attention to the pairs that are about to reach (or at) support and resistance areas. I note down in a small notebook which pairs I must focus on during the day – those that reached the right levels.

Without a daily routine in which you review the currency pairs you follow, you are more likely to make mistakes or realize that you missed perfect trade setups.

Reminders

  • Do not forget that support and resistance areas consist of a tool to look at the market. It is not a strategy by itself.
  • I always make a distinction between intermediary and major support and resistance areas. You can trade both, but understand that your win rate is likely to be lower with intermediary zones.
  • Support and resistance can be combined with other sideways indicators

Read: Successful Price Action Trading In 3 Steps

Do you use support and resistance in your own trading? Do you have any tips that could help other traders? Comment below and let me know!

If you are aspiring to Forex but wonder how to put together a solid trading plan, I recommend you grab my FREE One-Page Trading Plan Template. It will help you simplify your trading strategy on a single page!

4 Comments

  1. Victor
    October 24, 2017 at 7:32 am

    My favourite tricks to mark SR levels:

    1. i mark my SR levels with lines of different colour, those visible on daily and weekly with red, the intermediate ones with orange and those visible only on lower TFs with blue.

    2. i set the lower ones to be visible only to lower TFs, so i don’t clutter my charts. On my daily charts there are visible only key SR levels, not those relevant to M15.

    3. Another trick i like is to use for low timeframes not horizontal lines but smaller horizontal RAYs. In this way a level which lose its importance will be scrolled automatically to the left, so it’ll be no more in my main screen.

    4. My favourite way to mark higher timeframe SR levels is to use a very long box on a lower timeframe, marking the range, which will look like a line on a daily or weekly chart, so i can zoom in and zoom out to see this level better.

    • October 24, 2017 at 4:20 pm

      Awesome Victor!

      I think those are great tricks! Once you find something you are comfortable with, it’s easy to stick to it.

      Keep up the good work!

      Etienne

  2. November 10, 2017 at 4:57 am

    Hi Etienne,
    Great video on Support and Resistance! Very nice trading tips as well.
    I totally agree with this statement:
    “Do not forget that support and resistance areas consist of a tool to look at the market. It is not a strategy by itself.”
    Well said. In my opinion, sup/res provide some kind of structure to the Market.
    I use sup/res levels and supply/demand areas all the time.
    Thank you for the tips!

    • November 16, 2017 at 1:33 pm

      Thanks for the comment, Dave!

      S/R areas are usually what I start my analysis with…definitely has to be used for confluence. Glad you liked the video!