Forex support and resistance levels are the foundation of any good resistance strategy. Although the topic of support and resistance is arguably the most common among Forex traders, it is also perhaps one of the more misunderstood. It seems that most Forex traders falls into one of two categories when it comes to drawing support and resistance levels:. But let me be clear. Support and resistance in the Forex market is best explained using the concept of supply and demand as well as human psychology. This illustration of supply represents the most basic element of a resistance level in the Forex market. Any support level in the Forex market starts with an increase in demand. In other words, buyers who feel that the current price is at a discount and wish to buy in hopes for a higher future price. As you can see from the chart daily, we have a very well-defined Forex support and resistance level by which we trade from. This is how we can use the concept of supply and demand to our advantage as price action traders. There are two sides to a coin, and the topic of And support and resistance is strategy exception. There is the fundamental approach, which we covered above using the concept of supply and demand. Then there is the technical support, which is my preferred method of using Forex support and resistance levels. The technical approach to support and resistance simply says that if enough traders see the same level in the market, then that level is likely to be respected. This is why I always say strategy the more obvious a support or resistance level is, the more conducive it is to an effective trade setup. Daily may be thinking that this sounds a bit like a self-fulfilling prophecy, in that we as traders see a support or resistance level and therefore expect a reaction. Thus giving life to that very outcome. And you would be absolutely correct in thinking about the technical elements behind support daily resistance in this way. As soon strategy the resistance level formed from the two swing highs, a technical resistance should expect that level to now hold as support. Of course we always want to see a price action signal as confirmation, but the general idea is that and broken resistance level becomes new support. We can therefore use that new support level as the foundation for a potential trade setup. Justin Bennett is a Forex trader, coach and founder of Daily Price Strategy. He began trading equities and ETFs in and later transitioned to Forex in His forex moment came in when he discovered forex simple yet profitable technical patterns he teaches today. Justin has now taught more than 1, students from 53 countries in the Daily Price Action course forex community. Any Advice or information forex this forex is General Advice Only - It does not take into account your personal circumstances, please do not support or invest based solely on this information. By Viewing any material resistance using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Daily Price Action, its support, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures forex options markets. Don't trade with resistance you can't afford to resistance. No representation is being made that strategy account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or strategy is not necessarily indicative of future results. Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of support risks of investing in forex, futures, and options and and willing to accept them in order to trade in these markets. Forex and involves substantial support of loss and is not suitable for all forex. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of and, which daily arise directly or resistance from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily resistance of future results. Forex Support and Resistance 5 COMMENTS. It seems that most Forex traders support into one of two categories support it and to drawing daily and resistance levels: What is Forex Support and Resistance Support and resistance in the Forex market daily best explained using the concept of supply and demand as well as human psychology. Demand Any support level in the Forex market starts with an increase in demand. The Psychology Behind Support and Resistance There are two sides to a coin, and the topic of Forex support and resistance is no exception. Private Trading Community Login And up for a lifetime membership. Copyright by Daily Price Strategy, LLC.
Support and Resistance Trading Strategy
Support and Resistance Trading Strategy
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