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Important facts to remember when trading with supports & resistances

October 17, 2011

1  The supports and resistances can be seen at any time frames. S&R in smaller time frames are very weak and S&R in daily or weekly charts are very strong.

2  Price sometimes doesn’t change direction after meeting a S or a R. If price is increased further more  crossing a Resistance level or decreased further more crossing a support level we call it as a “breakout” .There are false breakouts and real breakouts and they are described later.

3  Never enter to a “sell” trade if the price is on the way to reach the resistance. Also never enter a “buy” trade if the price is on the way to reach a support.

Sell only when price has gone down some amount of pips after meeting the resistance and buy only when price has gone up some amount of pips after meeting the support.

5  Always place stop loss at least 10 pips above the resistance for sell trades and below the support for buy trades because slight variations of few pips might occur beyond S&R.

6  Never try to trade across S or R.

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One Comment
  1. Really Appreciate this update, can you make it so I receive an alert email whenever you make a new update?

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