As this is a new pair for me I may need to adjust my target several times during the trade.

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We have indecision forming on top of support. This indicates buyers are entering the market. It is too early to discuss entries right now, will update if the current candle closes well. Nick forex4noobs. For more analysis visit my blog at www. I mean't to write 'short reversal'. Keep in mind resistance can break. I am not saying I will definitely short. I am saying IF the right set up forms I will consider entering a short. We have seen several bounces from the 1.

If you do then that is usually a perfect entry for your reversal trade. Below is an example of placing the entry at the nearest psychological level on the trade. Below is an example of placing the entry at the low of the indecision on the trade above. However, it is not always an option as sometimes the wick is too big or too small. Entering a Reversal After you pick your confirmation line all you need to do is wait for it to be broken.

On the trade above, I picked the It was the obvious choice. With reversals I enter pretty much as soon as the line breaks. I manage the trade on the 15 minute chart as I do all my trades. How I manage is explained later. Reversal Trade Targets Since my method can be traded on multiple pairs targets vary greatly. Now I am calling them constant lines. These lines are called constant lines because they have been on the charts for decades.

Constant lines are lines at which we expect the price to find a permanent or temporary barrier. This is based on the price finding a barrier at this line in the past. These lines act as a dam would in a surging river. They hold the price from moving further. But when the price breaks through one of these lines it can come surging through and we can make pips So what exactly is a constant line, and why would the price magically stop at some seemingly arbitrary horizontal line?

Simply put, constant lines are areas traders expect the price to have trouble getting through. A constant line only exists because a long time ago the price happened to bounce away from it strongly. Because humans are programmed to look for patterns the next time the price approached that line it was traded as if the price might reverse from the line. This happened over and over until this line became widely recognized as a line at which the pair has trouble breaking through. So as it reaches that level they start closing positions thinking they might see a repeat of last time.

So, again the price has reached 1. The more this happens the stronger the line becomes. Eventually they become commonly viewed as areas at which the price will have trouble getting through. How I Use Constant Lines The basic idea behind these lines is to watch how price will react when the line is reached. Ideally what I like to see is the price approach the line, break through and then rush past the line. I usually trade the break of the line.

132: Trading Price Action With Support And Resistance (@Forex4Noobs)

So I enter when the line is broken and target a certain amount of pips. I will also trade bounces from the line. So if the price reaches the line and our candlestick analysis tells us that it may bounce from the line. Ideally with this kind of setup I want to see a trend heading to the constant line. Then a candlestick pattern that indicates a reversal forming on or just before the constant line. At the end of the day, all you really need to do is identify areas in which the price has reversed from or had trouble breaking before.

The main thing to keep in mind when placing lines is to make the lines fit the price not the price fit the lines. Many newbies try so hard to place lines they end up counting any minor price spike to the line as an actual bounce. So you should only place the obvious lines that really stand out. The daily chart helps clear up some of the noise and allows me to more easily spot the obvious lines.

The next step is to identify recent areas of support and resistance.

Support & Resistance | The Real Fact , That Every Trader Should Know | Intradaygeeks دیدئو dideo

So you basically take a look at where the price has bounced from or had trouble breaking the past few months. When you identify those areas place a line there. You will want to see two or more bounces from the same line in the last few months. Ideally you will want to see a wick bounce from the line. However, a body bounce is acceptable.

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This means you have to find multiple points at which the line was hit and reversed from or at least held the price back significantly for a while. You should see a few bounces every time the price is in that area. I go back about 10 years on my chart to confirm it is a proper constant level. Do not pick out too many lines, remember we only need to place obvious ones. You also want to have some distance between your lines. You just need to find lines at which the price has found obvious support or resistance in the past. The more obvious the line the better it is.

You just need to practice placing lines. Line Migration When placing lines you should be aware of line migration.

Lines tend to migrate slightly over the course of several months and years. Lines will move 30 pips up, then 30 pips down, so be ready to tweak your lines as time passes. Line migration occurs because occasionally a candle breaks past a line and then reverses, leaving a small wick pips beyond the line. The next time the price reaches that level it bounces away from the new high formed by that wick.

The idea when placing lines is to give more weight to recent bounces. Ok, ok! Check out the video on this page of me posting lines on my chart. It should help give you a better idea of how to place lines. However, this breakout trading is a little different than most types of breakout trading. The main difference is that I like to think when deciding to enter. I do not robotically enter the moment a line is broken. There are several factors that dictate whether or not I get into a trade, and if I get in to the trade when I get in.

Fair warning, this stuff is not something you will learn overnight. To be honest you can just avoid all the stuff written below and enter blindly the second one of the constant lines break. I have said it before and I will say it again. Forex is an ever-changing fluid market. To trade it properly we have to be fluid too.

I see each trade as unique and I judge it based on the factors below. Momentum Price Action : This is probably the main thing I think about when determining whether or not I will enter a trade. Some people have trouble understanding what momentum is so I will try to explain it as best I can. As far as I am concerned it is a simple concept. I believe the people that have trouble understanding momentum are overcomplicating things.

Support and Resistance for H4, H8, H12 and Daily Charts

It all comes back to price action, CA and what I talked about at the start of this book. When a line break happens you need to ask yourself the questions I mentioned earlier: 1. This always helps bring your mind back to the basics.

Look at the picture below. If you have a constant line to the short side and the price has been ranging tightly just a few pips above it for hours.