Become a Profitable Forex Trader Using These Support & Resistance Trading strategies

Learn more at https://www.dittotrade.com/

Hello and Welcome to the ditto educational series that will provide you with the skills you need to become a forex trader!

LEARN HOW TO TRADE USING SUPPORT AND RESISTANCE LEVELS

In today’s episode we are going to look at using support and resistance levels to trade the forex market and popular strategies surrounding this. Previously we have discussed support and resistance and some of the aspects surrounding its value, however today’s lesson will be a strategy based one.

Support and resistance is one of the most powerful analysis tools in trading. most forex strategies have some form of support/resistance analysis factored in to them as it is vital to to foreseeing areas in the market that may help or hinder our trades.

We know that Support and resistance develops surrounding key areas that price has regularly approached and rebounded previously. If we couple this knowledge with identifying the overall trend in a pair, being able to identify potential entries and additionally identifying our exit positions we have the basis for a strategy.

Strategy building is an essential part of a forex traders profession. Copying what others have already done is always a good start but as time goes on you will probably want to incorporate analysis that you have found to provide you with better long term results. We should look to discard what doesn’t work for us and retain what does ruthlessly in order to fortify our trading mindset and strategy.

Support

So firstly a quick look over our definitions!
Support is defined as an area on a chart that price has dropped down to but struggled to break below. support is the price level at which demand is strong enough to prevent the price from declining further.

Resistance

Resistance is defined as an area on a chart that price has risen up to but has struggled to break above. Resistance is the price level at which supply is strong enough to prevent the price from climbing further.

We have already discussed the basics in our beginner video so let’s move on to the strategy side of things which is our topic for today.

SUPPORT AND RESISTANCE TRADING STRATEGIES

We have four strategies to cover today and they have been chosen for their popularity, ease of use and effectiveness. They are easy to apply and I encourage you to back test them all to see which suits you the best.

1. Trend-line strategy

The basic idea behind the trend-line strategy is that it is using the trendline as either support or resistance relative to its upward or downward direction. We can implement the strategy by drawing a line connecting the high points in a downtrend, or by drawing one connecting the lows in an uptrend.

In a strong trend under normal market conditions price will usually continue to bounce off the trendline and respect the direction of the trend. This is why we only look for buying opportunities in a up trend and selling opportunities in a down trend. The trend is your friend so do not bet against it.

2. Breakout strategy

Breakout strategies can be very effective when done right. Generally speaking after long periods of ranging or consolidating markets eventually the price....

Видео Become a Profitable Forex Trader Using These Support & Resistance Trading strategies канала Ditto Trade