Support and Resistance
Support and resistance (SR) levels are one of the main tools for both fundamental and technical analysis used by both beginners and quite experienced traders besides many other tools even if the trader has extensive trading experience. So why have these simple lines become so widely used by investors? Let's think about this together.
These SR levels individually allocated conditional areas on a certain currency timeframe, bounded by price extremes; highs and lows, often represented as lines, but it should be represented on the chart itself to calculate all the risks and correctly place orders. SR level shapes will be completely different if represented on different timeframes of the same currency and period of time. On large timeframes, such as H1, H4, D1, and larger, SR lines are more reliable and less likely to be fake or misleading, not like those on M1, M5, or M15. They can be drawn either by candlestick bodies or by their shadows and no specific rules exist about that, there is still dispute among experts about which of them is better and more accurate.
The psychological component of support & Resistance levels is the key to understand how they are formed and how to they can be used. One of the following three conditional groups if prevailed in the market, would form a trend in it:
- Bears (open sell positions)
- Bulls (open buy positions)
- Undecideds (not yet on the market)
On a certain chart when the price touches pre-drawn support or resistance line, it probably either turn back away from that line or passes through it, and by refining the expected possibilities in this situation, 3 types of trading can be relied on guided by the Support / Resistance levels:
- Assuming a rebound from levels (range trading).
- Assuming a level breakout (breakout trading).
- A mixed type of trading (using both strategies alternatively, depending on the current market condition).
Each of these 3 Support / Resistance levels guided Forex trading strategies has been transformed into automated forex systems by Forex robot developers, and below are reviews of some of them that proved to be profitable:
WallStreetWolFx (WSWFX) provides traders with advanced tools and strategies to simplify trading and maximize profits. This includes a cutting-edge indicator to identify market trends and false breakouts, automated lot size calculations for proper risk management, a 1:3 risk-reward ratio system, real-time trading signals, and lifetime coaching and support. These components are designed to empower traders to make confident and profitable trades.
The Men Of Wealth V3+ Ultimate trading robot uses Price Action Trading Strategies. These strategies involve interacting directly with the market price to place trading positions for Long (Buy) or Short (Sell) with high accuracy.
The cornerstone principles for Power Trader take into account price action, market volatility, and short-term trending.
XFXEA calculates an entry point by evaluating a certain number of bars in a unique way and then forms a critical range. Based on this range, determines how and when to start trading.
All this is done without using the principle of Martingale.
The strategy of the Trader's Sun EA, embodied in the algorithm, is based on determining support and resistance levels, as well as identifying the behavior and direction of the Market’s movement, in order to assess the strength of the movement impulse and the probability of its continuation.
Trader's Moon EA is an Expert Advisor that uses the Martingale principle, but with a number of significant improvements and benefits.
Jet Trader Pro's calculate is based on the EURUSD highs and lows, making it the ideal tool for profiting from this currency pair.
It detects the final moments of a volatile market trend or session, identifies the volatility limits below which the dominant market trend is, and don't ignore the special situations when those volatility limits occur near important market levels, predict price levels that should capitalize when the market is readjusted after the volatility breakout has occurred, and finally it sets an order based on that prediction.
No Grid, No Hedging, No Martingale, and No Massive StopLoss. But a strong evolved Money Management System.
FX Classic Trader swings between Support/Resistances with continuous indicators analysis & calculations by a really unique trade algorithm to decide when to close and open transactions.
As the name suggests, Forex Combo System is a collection of several subsystems, four to be clear. The most accurate description that fits it is "four different EAs joined together". The result of such an EA could be considered "Pleasant" as you will discover this yourself after some further reading, It's an easy-to-use EA and is one of the most solid automated trading systems that I've ever seen.
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Risk
Forex trading can involve the risk of loss beyond your initial deposit. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Forex accounts typically offer various degrees of leverage and their elevated profit potential is counterbalanced by an equally high level of risk. You should never risk more than you are prepared to lose and you should carefully take into consideration your trading experience.
Past performance and simulated results are not necessarily indicative of future performance. All the content on this site represents the sole opinion of the author and does not constitute an express recommendation to purchase any of the products described in its pages.
