There are many people who do not know how they can use support and resistance level in Forex. These two things are very important for your career and if you know how to make your money by using these two levels, you can understand a lot more things in Forex. People only use their strategy and analyses in Forex but they also need to analyze the market from other angles. The support and resistance level can provide you important information that can give you an edge over the market. When successful traders trade, they are not using the strategy and analyses that all the other people use. They try to know as much information as they can and use them in their charts. These support and resistance level is a good indicator of when the prices are going to fall and when they are going to rise up in Forex. This article will tell you the role of Forex support levels and resistance levels in your trades. If you read this article, you will find that much of trading strategy is incomplete without support and resistance levels.
Price action trading system
Before we start discussing the support and resistance level lets deal with different types of trading system. Every trader is different and they have a different trading system to trade this market. But every one trade with the same goal, make a consistent profit. But in order to make a consistent profit, you will need a balanced trading system with a 60% win rate. The majority of the retail traders will start their career based on the indicator based trading system but within a short period of time, they will realize that indicators are nothing but helping tools.
So how do we trade the market? The simple answer is support and resistance level. You need to learn how to draw the key support and resistance level in your online trading platform. When you do the technical analysis make sure that you use the higher time frame data since it will give you precise information about the support and resistance zone. Instead of placing trades at the key levels use the price action confirmation signal. Some traders often refer this system as price action trading strategy. But make sure that you are not taking too much risk just by seeing a golden trade setup.
Forex support level
What do we mean by support? It is a thing that makes us stand on our feet again and this is what Forex support level does for the price of the currency pair. As the prices are changing and they are going down over time, these support level can tell you when the price is going to rise up in Forex. You do not have to draw your own support level on the chart as there are many choices in your trading platform that can provide you with your expected support level when you input your strategy. If you want to know when the price is going to rise up again and this information can easily be known with the help of support levels. Imagine what you could do when you know when the prices are going up in Forex.
Forex resistance level
The role of resistance level is quite the opposite of support level. They show us a barrier where the price is going to get down in Forex. It acts as a barrier that is going to prevent the price from going up and down in Forex. When you know how to use your resistance level in your charts, you can analyze the market more successfully.
Their role is very important in your trading strategy and analysis. They can tell you when the prices are going to get up and when they are going to get down. If you want to know about the change of Forex trends, support and resistance levels are the only help.