Forex Trading System*Important forex trading system tip: You need to be disciplined in your mind to plan your trade and trade your plan. Most trading systems will work 80% of the time. The difference between winning traders and losing traders is the mindset and implementation of the system. Before I give you the simple parameters of this forex trading system, I would like to understand that you can do this. You will overcome the initial shock of losses. But if you don't give up, you will make it. Be encouraged. Click here for clearer picture
Identifying Support and ResistanceThere are major and minor forms of support and resistance. Major support and resistanceA major support will occur if a currency pair declines to retest a previous low. A major resistance will come into play when a currency pair is advancing to retest a previous high. Minor support and resistanceA minor support will occur when a currency pair declines to test prior resistance or prior high. While a minor resistance will come into play when a currency pair is advancing to retest a prior low. Profitable trades in forex will come when you focus on managing your losses. Practice taking really small losses. This is possible when you place your initial stop loss as specified in the exit strategy. See chart below for examples of major and minor support and resistance.Click here for clearer picture
*Important tip: Charts don't lie. Trade what you see on the charts and you should be fine. Never sell at a support zone. Never buy at a resistance zone. Interpreting Support and ResistanceLooking at the chart above, you can clearly see that the support and resistance are specific prices rather they are zones. And most often will not be broken at a first test. That is why there is always a retest. And when a retest occurs and its not broken,then it becomes a major support or resistance zone. At major support always strive to look for your buying setups. These setups are usually low risk. In like manner always look for your selling setups at major resistance. On my daily trading, I use 15 minute chart. I always plot the daily pivot points on it as points of reference for support and resistance. It has mostly worked in my favor. See this example below. Click here for clearer picture
Support and Resistance Trading How do you trade using support and resistance? Click here for clearer picture
*Important tip: Never place a trade without an initial stop loss. It will ensure your capital to remain in the trading business. You just completed your basic forex trading tutorial with a lesson on Support and Resistance. If you came directly to this page from the search engines, then I encourage your to goto Forex Trading Tutorial. Get started with Trading Basics Menu. You will gain much by starting here. If you have read everything on the Forex Basics menu, then it is time to get the beaf of my trading system by heading to menu Forex Trading System
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