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Independent Study Using Support and Resistance 1
Independent Study Using Support and Resistance 1
| Using Support and Resistance 1 |
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Using Support and resistance to trade will take practice. In fact every strategy you use will take practice. If you are unwilling to practice, please just stop trading now and find a softball league to participate in. It will be much nicer to you and you won’t spend as much money. However if you are willing to practice, here is the first thing you will need to commit to practice on a daily basis, Support and Resistance. In this chart you will see several different support and resistance lines you could have traded. Against these lines you have one of two options, buy or sell. Using proper money management you can begin trading and may even possibly see some success. Let’s zoom in see how we could have traded both directions.  In the following example, a long trade with a risk to reward of 1:2 would have paid off nicely.** When looking for stops make sure you practice a lot, but a good rule of thumb is to place the stop above or below recent support or resistance. So often, price will break a support or resistance zone to touch another area. To help alleviate this, place your stop 10 or 12 points above or below the previous support or resistance.  In this example next example, we sold an approach to resistance, placing our stop above the resistance see previously, as well as pulling out target up from previous support.  Using MoneyTrek is a great way to practice this trading style. Open the program, move through a few support and resistance points, then open this page and read through it as you make trading decisions. |