Trade Forex Successfully with
Support and Resistance Strategies
Improve Your Forex Success with Valuable Techniques.
Applying the Rules:
Applying the Rules: Rules 4-6
Rule 4: Identify support AND resistance areas. Find areas that not only exhibit support or resistance but ones that act as both a support and a resistance zone.
Look for areas that have shown both supporting and resisting characteristics over a period of time. These will be the best lines as they show strength on both sides and because of this, reinforce the validity of the line.
Rule 5: The best support and resistance areas have been around for a long time. Like a good wine, support and resistance zones only get better, or in this case stronger, with age.
The longer a support/resistance line has been around, the stronger that line tends to be. This proves specifically useful when a currency pair approaches an area it has not traded near for a long time.
In addition to that, support and resistance lines are stronger on longer time frames. That is to say that a support/resistance zone on a daily forex chart is stronger than a support/resistance line drawn on a 15 minute chart.
It is important to remember that just because a support or resistance line is old, does not mean it is out of date. On the contrary, the older lines are, the more important the support and resistance zones are.
Rule 6: Add your own rules and filters that you find helpful.
These rules are intended to help you find significant support and resistance zones, but by no means are they the only rules that you should or could use. Play around with different forex charts and different time frames and see what you find most useful and most productive. Create rules that are simple and easy for you to follow. This way you can continue to apply them later on in your forex trading career as well as easily adapt them if you come up with different ideas.
You can also modify the rules present above to fit your own forex trading style. There are many different ways to apply these rules, and the one thing that many successful traders possess is the ability to adapt what they are taught and customize it to their own specific needs.
If you find that you need to modify these rules to fit your trading style, then you should do exactly that.
Remember that regardless of the trading strategy having properly organized support and resistance lines and pivot points drawn on your chart can be a very useful guide in your trading. Now that you have your key zones marked on your chart you can begin to apply them with the two forex trading strategies you are about to learn.