Forex brokers reviews

Make the trade
  • Home
  • Market news
  • Forex glossary

How to build Forex Strategy

July 11, 2012 by Forex Market

Support and Resistance

In the markets support & resistance has had a recurring nature. When strong support & resistance levels are observed, it enables you to successfully plot your approach, adjust risk levels and manages trades. You can identify support & resistance by the following methods.

Price Action

Many of you think that price action has some special relevance, when you identify support & resistance levels for very strong reason. For example, currency pair AUDUSD , if you look that price has reached at the level of .9956, and then you could confidently say that price of this pair has reflected off, because at this level (. 9956) the sellers get increased than buyers, in the market. This points out that the resistance was observed at .9956.

Psychological Whole Numbers

We always use round numbers, for example my car price is $ 41,555.94 and if someone asks me how much price of my car is? I would say $ 40,000 instead of 41,555.94, exactly this happens in your trading also. Many traders place limits and stops at round numbers like, 1.0000 on currency pair AUDUSD.
The limits or stops that are placed at this level can affect flow order. They act as a stop and a brick wall and reverse price to downward. During an uptrend in market price gets blocked on the up level resisting around the whole numbers and same in downtrend.

Fibonacci

Fibonacci has seen much more ‘creative’ researches on the use of Technical Analysis. It has had a lot flavors but here we would focus on Fibonacci retracements. To plan a Fibonacci retracement, you need to see a trend. For this purpose most charting packages are available by which you may indicate the period for analyzing.

The trend traders would usually hope the original trend returning into the equation. So in the long-term downtrend he may indicate the trend onto the chart. Since the prices come back, during the downturn re-traced period, the trader looks to enter trades with the hope of downtrend back. Some traders use Fibonacci, some use Price Action and Pivot Points’ mechanisms.

Pivot Points

You can identify Pivots Points by many ways. It is support & resistance measuring element.
Pivots are calculated by seeing the past price behavior. How usually they function?

‘Floor-trader Pivots’ is the trendy form of these pivot points. The calculation of ‘Floor-trader Pivots’ can be done by this formula, high+low+close of past periods/3. It’s the average of three prices then you multiply that with 2 and then from this price subtract the “yesterday ‘low”. In this way you will get at the pivot level ‘R1’. Forgetting ‘S1’ pivot level multiply this pivot price again by 2, but this time you would subtract the “yesterday ‘high’.

Which support& resistance element works best?

It’s up to you which strategy do you adopt. All support & resistance levels that we have mentioned before have had any predictive behavior. Everyone is just a probability which you would not be able find out unless the trade finishes.

But it is true that these levels could help you build your approach to work along with those probabilities.

Related posts:

  1. Pivot points: definition and use of pivot points as a trading tool
  2. Metatrader: The Story of pivot points
  3. Pivot System Support and resistance
  4. Forex: Evolution of the USD / JPY
  5. The USD / CAD is in a downtrend
  6. Forex: USD CAD Evolution
  7. Forex: EUR USD Evolution
  8. Forex: Evolution of the AUD / USD
  9. Forex: Evolution of the USD – SEK
  10. The GBP / USD remains bearish

Filed Under: Learn forex trading

LMFX PAMM

Forex sections

  • Auto trading reviews
  • Autotrading forex
  • Binary options
    • 24Option
    • Anyoption
    • IG Markets
    • OptionBit Review
    • Trade Rush
    • Ubinary Review
    • Winoptions
  • Daily forex report
  • Financial
  • Forex affiliate programs
    • Avapartner Review
    • Hotforex Affiliate
  • Forex brokers
  • Forex brokers review
    • 4XP review
    • AAAFX
    • Admiral Markets
    • Alpari
    • Alpari UK
    • Avatrade
    • Deltastock
    • Dukascopy
    • EasyForex
    • Etoro
    • ETX Capital
    • ETX Capital Review
    • Exness Review
    • Forex.com Review
    • ForexYard Review
    • FXCM
    • FXOpen
    • FxPro Review
    • HiWayFx Review
    • Hotforex
    • HY Markets
    • IFC Markets
    • InstaForex
    • Marketiva
    • Markets review
    • NordFx Review
    • Pepperstone Review
    • Plus500 Review
    • Roboforex
    • Roboforex Review
    • Swissquote Bank
    • UFX Markets
    • XeMarkets Review
    • XForex
    • Youtrade FX Review
    • Zulutrade
  • Forex free course
  • Forex platforms
    • Metatrader
  • Learn forex
  • Learn forex trading
  • Promote forex broker
  • Rate forex brokers
  • Stocks
  • Weekly forex trading
  • World economy news

Top forex reviews

  • Aaafx review
  • Alpari NZ review
  • Alpari UK
  • Avatrade Review
  • Exness review
  • Fxopen review
  • Fxpro review
  • Hotforex review
  • Instaforex review
  • Markets.com review
  • Thinkforex review
  • Ufxmarket review
  • Xemarkets review
  • Zulutrade review

Site links

  • Home
  • Market news
  • Forex glossary

Recent Posts

  • Instaforex $1000 free no deposit bonus
  • Fxpro Top Forex Broker Review
  • ETX Capital Review
  • Trade Binary Options with IG – IG Markets
  • Tradeo Review – signals from top traders

Copyright forexat.net 2009