bullish direction according to your view. The picture below compares two levels a stronger resistance versus a weaker support: Lets take a look again at the EUR/USD Forex pair but this time on a weekly chart. Download the short printable PDF version summarizing the key points of this lesson. These are often referred to as psychological support/resistance levels. They are more like zones that can be breached and pushed into and then it may pull the price action back out of it or maybe price action will succeed in breaking it for good so Zones and far better term to describe. On the other hand, if it breaks that level it may be real breaking or a fake breaking so we also should see a strong piercing candle that effortlessly break that level to assure it will continue on the same way. Also, buy when the price breaks resistance and sell when the price breaks support. The purple line is a 7-times tested resistance of the price, while the yellow line is a 4-times tested support.
Forex support and resistance strategy pdf
Support and Resistance Simplified - Traders Library Trade Forex with Support and Resistance Strategies - MQL5 Support and Resistance Zones- A simple Strategy to Trade 36# Tutorial Support and Resistance - Forex Strategies
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In other words, when breaking the level in a bearish direction, price relocates under that level and the old support levels now becomes a new area of resistance. Here, you can see that those weak candles were not able to breach the Resistance line and had long wicks and could not break that level so we wait to see what will happen with the next candle will the price action break that level. Thats because it already did that before in the past and it will continue to do so in the future as traders will always take caution on these levels so some who had open trades will exit at those levels and others will initiate new. If you go long on your support level, the most logical place to put your stop loss would be below the support area. When you are doing support and resistance trading, a line with multiple touches is far better off as it is clear that it stood against the price and passed the test for many times and it will continue to. This is why it is paramount to always use a stop loss when trading.
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