Unlock the secrets of successful trading with our comprehensive FREE Trading Course designed for traders of all levels. Learn proven strategies, risk management techniques, and market analysis tools to elevate your trading game. Start today and gain the skills to trade confidently in any market!
Supports and resistances are levels where the price has a great chance to bounce. We will notice how the price will bounce several times on the same level before continuing its rise or fall.
Supports: Levels at which the price is supported to continue its rise or fall. Resistances: Levels where the price is stopped and will tend to rebound. I suggest you start drawing them in the line chart and then correct them in the candlestick chart.
Important: Once a resistance is broken, it will become a support to reach a new high.
As we can see from the line graph, the supports and resistances are points where the action bounces. Let’s go and study them with the candlestick chart.
With the candlestick chart, we can see even better how the points that seemed not to touch the supports and resistances, through the shadow of the candle, actually touched. You just have to be careful. Now that you have learned how to find the support and resistance points, you must find the resistance and support zones. The support and resistance zones are used to avoid falling into the trap of not seeing a touch. Remember to draw the zones on the candlestick chart. Below, I reported an example.
We analyzed a chart whose trend was rising, but if the trend were bearish, the concept would have been the same. Now that we have finally understood the support and resistance levels, we must understand when to open our position in Buy or Sell. Now, the famous candles that we studied earlier become important. Candles, combined with support and resistance, are a powerful way to enter the market and generate profits.
Important: Draw your support and resistance levels within the time frame at 1h / 4H / 1D. The entries are shown in the graph below.
As you can see, I have drawn my support and resistance zones with high time frames, but I entered at 30-minute time frames. The first position is a sell; a “Hanging Man” candle and a “Shooting Star” candle have formed, and it’s time to bet on the descent. The Stop Loss place is 15 PIP above the resistance zone, and the take profit at the beginning of the support zone. As we can see, a “Hanging Man” candle has formed in the support zone; we can enter again by betting on the rise. We place the Stop Loss 15 Pip below the support zone and our Take profit at the resistance zone. Both of our trades have respected the zones and reached their T.P. Please do not rush; always wait for confirmation. Trading is patience and psychology. Remember that!
“The secret to being successful from a trading perspective is to have an indefinite and tireless thirst for information and knowledge.”
Paul Tudor Jones
Share it:
Join the thousands of traders who have changed their lives Thanks to our instantly funded accounts
Don’t wait any longer, the perfect moment is NOW.
OFP FUNDING Is A Trademark Brand Name Owned By FINTEKNOLOGY LTD. UK
(Company Number: 15131112)
FINTEKNOLOGY LTD London, The UK – Copyright © 2024
OFP FUNDING Is A Trademark Brand Name Owned By FINTEKNOLOGY LTD. UK (Company Number: 15131112). The Services Provided On This Website Are Professional Skill-Assessment Services. The Outcome Of The Proposed Services Is Necessarily Determined By The Individual’s Professional Skill Level And Ability To Perform Under The Program Guidelines And Objectives As Elaborated For Each Service Separately. Clients Are Advised To Conclude A Thorough Study Of The Requirements Of The Program Before Signing Up For Any Of The Services. Hypothetical Performance Disclosure: All Accounts Used For The Services Are Simulated Accounts. Hypothetical Performance Results Have Many Inherent Limitations, Some Of Which Are Described Below. No Representation Is Being Made That Any Account Will Or Is Likely To Achieve Profits Or Losses Similar To Those Shown; In Fact, There Are Frequently Sharp Differences Between Hypothetical Performance Results And The Actual Results Subsequently Achieved By Any Particular Trading Program. One Of The Limitations Of Hypothetical Performance Results Is That They Are Generally Prepared With The Benefit Of Hindsight. In Addition, Hypothetical Trading Does Not Involve Financial Risk, And No Hypothetical Trading Record Can Completely Account For The Impact Of Financial Risk Of Actual Trading. For Example, The Ability To Withstand Losses Or To Adhere To A Particular Trading Program In Spite Of Trading Losses Are Material Points Which Can Also Adversely Affect Actual Trading Results. There Are Numerous Other Factors Related To The Markets In General Or To The Implementation Of Any Specific Trading Program Which Cannot Be Fully Accounted For In The Preparation Of Hypothetical Performance Results And All Which Can Adversely Affect Trading Results.
Finteknology and OFP Funding are not a broker and do not accept deposits.
Paynetics provides payment processing services to prop trading Finteknology solely for facilitating transactions during their evaluation period. This service is provided on a limited basis and does not constitute an ongoing commitment by Paynetics to process payments for any further stages.
