Support and Resistance Forex

Trading Strategy
Support and Resistance Forex trading strategy is a widely used

forex trading system based on horizontal support and resistance

levels. The candlesticks’ highs and lows form these levels. A

breakthrough of these levels after a period of consolidation signals a

trend. This strategy doesn’t require any mt4 chart indicators except

for the ability to draw lines (at least imaginary).

Features
 Well-defined low stop-loss(SL).

 Relatively high success rate.

 Unclear target levels.

How to Trade?
1. The support level is formed by the lows of two or more

candlestick bars that include a relatively straight horizontal line

with no lower lows between them.

2. The resistance level is formed by the highs of two or more

candlestick bars that form a relatively straight horizontal line

with no higher highs between them.

3. Consolidation is a period without any market trend, forming near

support or resistance level, with relatively small candlestick

bodies.

4. A close below the chart support level signals a short sell position.

5. A close above the chart resistance level signals a long position.

6. Stop-loss(SL) is set to the low of the previous candlestick (for

the long positions) or the high of the previous chart candlestick

(for the short positions).

7. Take-profit(TP) can be set relatively to the stop-loss(SL) or as a

trailing stop.

Example
Support set-up:
Resistance set-up:
A period of chart consolidation is clearly seen on both example

charts. In both cases, the chart support/resistance level is formed by

two candles for a short period. Stop-loss is placed close to the entry-

level. Take-profit couldn’t be clearly set at the position entry

moment, but a risk/reward ratio(R:R) of not less than 1:2 could be

used efficiently. If you have trouble detecting support and resistance

levels on the chart, you can use our free forex MT4/MT5

indicators: Support and Resistance or TzPivots.

Warning!
Use this strategy at your own risk. fxcracked.com can’t be

responsible for any losses associated with using any forex strategy
presented on the site. It’s not much recommended to use this forex

strategy on the real account without testing it on the demo first.

Read More QuantumFX Forex Indicator System FREE Download

Discussion:

Do you have any more suggestions or questions regarding this

strategy? You can always discuss Support and Resistance forex

Strategy with your fellow Forex traders on the Trading Systems and

forex Strategies forum.