Since the market is so slow, I thought about writing about the tool that changed the way I trade, in fact, it changed the way I see the market for ever.
Are you ready?
The name of this tool is…
Support and Resistance levels
Did you think I was going to show you a new indicator?
Long live Support and Resistance levels!
This is how I use support and resistance level (and you can use them too)
- I use long term S&R levels to determine which way to trade (bullish, bearish, no-trade)
- I use short term S&R levels to pinpoint my entries
- I also use short term S&R to take partial profits (if I’m going long from a short term support level, then I take partial profits around the next short term resistance level).
- Long term S&R levels to take profits
- I use S&R levels to create a trading plan for each currency pair (e.g. if the market breaks an important resistance level I’ll start looking for long opportunities).
What else do you use S&R levels for?
What’s your favorite tool or indicator to trade the Forex market?