Here are a list of 4 tips, tricks and final thoughts around placing forex support and resistance zones.
Forex support and resistance zones aren't brick walls: Don't fall into the trap of thinking that a support/resistance zone on your chart is an impenetrable barrier that price can't ever break. They're merely a guide where you think other traders are going to be doing business.
Forex support and resistance zones are interchangeable: That is, once broken, support will often then act as resistance and vice versa. This is why I usually always refer to support and resistance zones using both words together.
The more touches a forex support and resistance zone receives, the more significant it will be: Notice that I didn't say that more touches on a zone makes it stronger? Touches add significance because more and more people start watching and building orders around the zone.
When price pokes through a forex support and resistance zone before reversing, stops are being hunted: No, this is not your retail forex broker trying to specifically screw you over. This is smart money from banks and institutions taking advantage of stop orders that are clustered just beyond obvious support and resistance zones. By waiting for these clusters to be cleared, you can ride on the coattails of the big boys.
This brings the support/resistance section of this trading guide to an end.
Next up, we're going to move onto price action and then finally get to combining the two to actually trade my strategy.
Best of probabilities to you,
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