Support and Resistance simple strategy

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Support and Resistance simple strategy

is a widely used trading system based on the horizontal levels of support and resistance. These levels are formed by the candlesticks' highs and lows. A break-through of these levels after a period of consolidation gives a signal for a trend. This strategy doesn't require any chart indicators except for the ability to draw lines (at least imaginary)

Features
Well-defined low stop-loss. Relatively high success rate. Unclear target levels.

How to Trade?
Support level Support level is formed by the lows of two or more candlestick bars that form a rather straight horizontal line with no lower lows between them.

How to Trade?
Resistance level Resistance level is formed by the highs of two or more candlestick bars that form a rather straight horizontal line with no higher highs between them.

Consolidation
Consolidation is a period without any trend, forming near support or resistance level, with the relatively small candlestick bodies.

Close Manner
A close below the support level signals a short position.

A close above the resistance level signals a long position.

Stop-loss & Take-profit

Stop-loss is set to the low of the previous candlestick (for the long positions) or to the high of the previous candlestick (for the short positions). Take-profit can be set relatively to the stop-loss or as a trailing stop of some sort

Example Support set-up:

Example Resistance set-up: :

Thank You

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