country flagالعربية

Learn To Trade

Trading on the support and resistance in the Forex

05-08-2017 | No Views : 628

Trading on the support and resistance in Forex is one of the most popular ways to identify entry points, but not only by relying on them, but by combining them with your trading strategy. In previous lessons we explained the types of support and resistance to classical channels, but we did not explain their trading methods.
There are two ways to trade on the support and resistance, which is to enter with the price rebound. This is a reversal of the trend. We mentioned at the beginning that their application is with your trading strategy. If you are trading on the reflections and with the tools that help you, the rebound method is appropriate for you after you have identified the points Support and resistance.
If you are trading in the Forex, with the trend like most traders, the breakout pattern is best for you, setting you resistance levels in the uptrend and entering the breach as confirmation of the continuation of the uptrend and vice versa for the downside move.

Trading on the rebound in prices in Forex

The bounce of prices from a certain level means a reversal of the current trend or the need for the price to correct or change the direction completely, and this means you enter with the beginning of a new direction and in this case will be your goal to a large extent, but in the case of reflection should be aware that the correction could end in Any time before reaching the goal.

We do not recommend the novice to trade in this way in the foreign exchange market, because this type of trading requires professional in the type of analysis you operate, and sometimes requires the use of more than one type of analysis to determine your reflection points, and this type of trading is good for trading when the price within an accidental direction when the price reaches its limits, as shown in the attached picture.
Despite the difficulty of this type of trading, we should have explained and explained to be aware of it, and if you have the tools that help you in this you can then trade with the rebounds.

Break in foreign currency trading

In the beginning, let's make it clear that the rise of the price above the resistance is called a breach of this level, while the drop below the support is called a break to the level, and this method is the best for trading because it is less risky than trading on the rebound in the Forex market.
Trading with the breakout means that you are trading with the trend and this raises the probability of success of the deal, as there is a saying Trend is your friend, make the trend a friend and do not trade reverse only in the narrowest limits.

Trading with the breach makes you on the security side. For example, after the breach of the resistance price and the confirmation of the breach, the probability of a continuation of the upside increases, which makes the transaction a high quality, as in the picture above, the breach occurred in a bullish direction and then the breach was confirmed and then the price went up.
It should be noted that, sometimes a re-test of the level occurs after the penetration of the price as shown in the attached picture.
After explaining the trading on the support and resistance in the Forex market, we must mention that the above explanation also applies to trend lines, and any chart of a stock or currency.
Dear reader, you can navigate between the lessons in the Forex School, to learn about the different types of analysis that should be present in addition to the trading of dues and resistors.

Ichimoku Kinko Hyo index Classic channels
All Rights Reserved
Risk Disclaimer: Trading in foreign exchange market (Forex) includes the risks and the possibility of loss. That is why we are keen on providing the highest quality news and analysis concerning the different markets traded. The opinions expressed in the site indicate the opinion of the author only and not the views of the administration or the public, knowing that errors could be encountered and there is a possibility to commit them. Before starting to trade you should carefully consider your investment objectives, and review the level of experience and risk appetite. In some cases, possible high leverage can lead to loss of funds invested, so you can not invest money that you can not handle its possible loss. You should be aware of all the risks associated with foreign exchange trading and seek for advices from an independent financial advisor if you have any does not assume any responsibility after the occurrence of financial loss to the dealer and the user carries full responsibility for the losses resulting from the use of news, analysis and data on the site.