How to use support and resistance for big profits

price charts, though they contain shares or currency pair Forex / currency often show the latest items prices stop. Resistance – a point on the graph, for which the price can not receive or "resist" to boost. If the prices are not low points, this point is called a support.

Resistance and support points of the show, when the prices for the last time stopped at the maximum and minimum, respectively. This level can be important, as the prices continue to move, forming a channel (consolidating), but this is not always the case. The longer the consolidation, the greater the chance for a breakthrough to new highs and lows.

In trade, the greater the daily trading, you can use resistance and support more than one way to quickly enter and exit trades with low income, without having to deal with the risks that come with a swing. This is possible only if we change the old idea of ​​support and resistance.

First, start looking at support and resistance as the entry and exit points subject to sudden movement or a break in either direction. Since the movement entirely based on probability, do not understand their own ideas about the two points. Suppose, for example, the price movement to resist. Typically, the movement above the resistance will mean a buy, so that you stop just below the resistance. If the level does not obey your outlook and instead go down, you can make a decision to put a stop to a point just above the previous resistance level. Thus, you are said to have traded on the basis of market supply and not assumptions.

When you trade a currency pair that is consolidating, watch carefully for the increase of the & # 39; volume, as this could mean a quick breakthrough with prices that run through the line of resistance or support, and to start a trend in this direction. Comparatively slow rates that are creeping in at any level, mean low of & # 39; volumes and a lack of interest. For example, a quick movement and a lack of & # 39; volume in resistance means that it will not easily break, so the short trade would be appropriate. Always watch out for these scenarios.

On the & # 39; the volume and prices often move in the open market. Therefore breakouts are more likely around this time, but you need to comply with a rule to keep out of the first 15 minutes after the opening of the main markets and the trading trend developing. Breakthroughs are rare at lunchtime due to falling traffic and a small & # 39; volume. Thus, resistance or resistance is expected, even though one or two wild false breakouts are still possible.

If prices begin to change back and forth, just sit back and do not trade. Instead, think to study high and low, to create a movement back and forth, and take advantage of this by using the above trick in practice.

Therefore, keep in mind that the time of day influences the movement behavior. Also, remember to make sure there is interest and a & # 39; in the volume of the currency pair you wish to trade.