Advice

Support and Resistance: Catching Movements

No Comments 30 September 2009

Forex trading is a combination of different factors and understandings of the market. Many people who think about forex trading as a get-rich-quick scheme get literally shocked seeing the complexity of this market. Without proper preparations and a decent amount of learning about various forex-related subjects, it will be that much harder to read the market’s movement.

One of the indicators or technical pointers that I personally think every trader should know is support (and resistance). When you see a pair gong down and then bounce back up after hitting a certain level, then do it all over again only to bounce back up at the same level, you are probably seeing a support level. Resistance is for the upper barrier. In normal market condition, the distance between support and resistance will be at around 40-60 pips and more. If you are seeing forex trading from the right perspective, you must have already notice how calculating and reading support and resistance can help you make profitable trades.

A good rule of thumb is to buy at support and sell at resistance. When a pair hits its support, especially a strong one, you know that it will bounce back up for several pips. Depending on the strength of the market, you can get 20 pips easily using the support and resistance theory. Combine it with other indicators and you have a strong trading system in your hands. Now that you know how reading support and resistance can benefit your trade, you can use it as part of your overall trading strategy.

Trend Lines

Understanding Trend Line

No Comments 11 September 2009

The key to successful forex trading is being able to read the trend line and use it to your advantages. There is no doubt that a lot of professional traders are banking substantial profits because they are very good at reading the trend line. I’m not saying that you should be an expert on this matter; having enough knowledge of what a trend line is and how to use them can really benefit your forex trading activities in the long run.

Trend line is a line drawn using certain pointers such as consistent highs or lows, or in some cases open and close positions, to see the general moving direction of a particular pair. Even new forex trader can understand that being able to see the trends will help them go with the market and make more profit.

Using the trend line is very simple — you just need to go with the trend — but you can’t rely on trend line alone. There are a lot of other factors, both technical and fundamental, that may affect a pair’s movements so you still need to read a clear confirmation before making your move.

Trend line is a powerful technical indicator indeed. Use it in combination with Moving Average, RSI, or any other technical indicators to create a profitable trading system that will help you succeed in forex trading. Keep an eye for movements and opportunities to enter the market, and use your trend line to go with the market. A lot of traders have made profits using this method, and you can use the trend line for the same cause as well.


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