Important Points to remember while using Support and Resistance Price Levels
We have learned the basics about support and resistance levels, trend lines and price channels and also gone through the advanced methods as how to use them while trading forex.
Let’s have a quick recap of all the lessons, we learned about support and resistance, as a result, it would become easier to implement while trading forex than just jumping on another lesson.
9 Points to Remember while using Support and Resistance Price Levels
8 Points to Remember while using Trend Lines
7 Points to Remember while using Price Channels
5 Basic Points applied to any type of Technical Lines i.e. whether it would be Support and Resistance Line, Trend Line, Price Channel Lines or any other type of lines.
1. The line i.e. price zone is valid until it is broken i.e. price may penetrate above/below the lines, but they are valid until the bar or candlestick shows a significant close above/below the lines.
2. Whenever the price breaks a support or resistance price level, it could later retest it before continuing in the opposite direction and, as a result, this fresh price level becomes the new resistance or support price level. We can benefit from the newly established price support or demand zone to follow the new trend.
3. The more often and quickly a price level is tested, it becomes weaker, because if the market price returns again and again, the pending orders and demand will get fulfilled, as, so there is a possibility of price breaking the price level.
4. The longer the price is supported or resisted at a price level, the stronger could be the future move after breaking that price level.
5. All lines should be created and implemented if the price respects them, otherwise do not forcefully draw lines by adjusting it to the price points because doing such a thing would result in only making us happy, but would not be reliable and also inappropriate, as a result, you might pay some ticket fees for entertaining yourself.
Trading the Beautiful Lines
It is strongly advised that all these beautiful lines should be used as an additional tool with your forex trading strategy for confirmation that yes; odds are in my favor, before entering the market.
As we have seen in the previous chapter, how to trade a bounce back and break out at a demand and supply level, we should always enter the market in a conservative way after getting a confirmation for our perfect entry in an established trend direction.
Yup! the support and resistance lesson has completed, go ahead, grab some charts and explore your artistic talent to draw all the beautiful lines
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