How to Draw Forex Support and Resistance Levels

http://goo.gl/JIEFl8 The ability to properly draw support and resistance levels is one of the most basic skills every price action trader must have. It’s also the building block for everything that comes after it, including price action trading strategies like pin bars and inside bars as well as a proper risk to reward ratio. Get it right and trading starts to become effortless. Get it wrong and your trading experience will most likely be a frustrating one. In this video I explain what a support and resistance level is, as well as why these levels form. We’ll also dive into how to properly identify these levels. A support and resistance level is simply a level in a market at which traders find price to be overpriced or at a discount depending on current market dynamics. This creates a level in the market that can act as support or resistance depending on various factors surrounding each currency. So that’s the “fancy” definition of a support and resistance level. Now for the price action trader’s definition… A level at which we can look for price action buy or sell signals such as the pin bar. That’s really all we need to know. We aren't concerned about why a level has formed. Instead we’re focused on how important that level is relative to the surrounding price action. If it’s deemed to be an important (key) level that we want on our chart, we simply wait and watch for a price action buy or sell signal to develop. http://goo.gl/JIEFl8

Comments

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