moonchild
VIP Contributor
Support and resistance gives the market the direction, price don't move in a linear directions it always move sideways, either trending or ranging, as a forex trader you have to learn how to spot this levels to take advantage of them, today we'll be talking about monthly support and resistance.
In Forex, the higher the timeframe the more important and strong the level is, you can't compare a trendline on the 5 minutes chart with a trendline on the 4 hour chart, the former will be easier to break. To spot these levels you have to switch your chart to monthly time frame, use the cross hair tool to move around your chart and look for where two wicks touches at the top or at the bottom, see if it happens more than twice, if it does that means the level is valid, you can draw a horizontal line between the touches, have like three more lines like that, use a different color to differentiate so that you won't be confused later.
Whenever you see price approaching this levels you already know it will hold, so you just jump to the lower timeframe and enter for a sell, that's how easy it is to trade with using those levels.
In Forex, the higher the timeframe the more important and strong the level is, you can't compare a trendline on the 5 minutes chart with a trendline on the 4 hour chart, the former will be easier to break. To spot these levels you have to switch your chart to monthly time frame, use the cross hair tool to move around your chart and look for where two wicks touches at the top or at the bottom, see if it happens more than twice, if it does that means the level is valid, you can draw a horizontal line between the touches, have like three more lines like that, use a different color to differentiate so that you won't be confused later.
Whenever you see price approaching this levels you already know it will hold, so you just jump to the lower timeframe and enter for a sell, that's how easy it is to trade with using those levels.
