Pre-Requisites To Support Resistance Trading Support Resistance Trading is by heavily used by traders. As traders will plot charts with trendlines and key horizontal levels to mark the support and resistance levels. This only half the battle to profiting, the other half requires the trader to be able to trade these levels.
Every Trader Has His Own Support Resistance Trading System Somehow, each trader has his own way of identifying key support and resistance levels and there are some who do not even know how to plot. The next few points will highlight what are support and resistance levels so that a trader is able to plot and use them effectively without compromising the quality of his trading performance for his support resistance trading strategy. Therefore it serves as a foundation to support resistance trading.
Key Foundations To A Good Support Resistance Trading System Using Trend Lines Trend lines in support resistance trading are used to depict the direction of price on a chart. These trendlines are often used to enter trades whenever the market touches or breaks through them. As trendlines drawn are subjective in nature, there is a possibility that the price can choose not to respect the support or resistance line a trader has plotted. It should only be used as a guide to determine a trader’s trade intention of a buy, sell or stand aside base on the trend. Generally accepted practice to draw a trend line in support resistance trading is by connecting three or more consecutive lows increasing in price for uptrend or consecutive highs decreasing in price for downtrend.
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