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Thread: Forex Trading Strategy - Resistance And Support

  1. #1
    riteforu Guest

    Arrow Forex Trading Strategy - Resistance And Support



    The fundamental of the most trading patterns and strategy is formed from resistance and support levels. These levels are not just becoming apparent on the Forex market, but they are becoming apparent on almost all trading markets that have even the smallest degree of fluctuation in their value. In this article I will try to explain what resistance and support levels are and how they could be used as a basic Forex trading strategy.

    Resistance and support levels could be described as levels in which the price is having challenging breaking through. In a purchase situation the price could move up to a level and then drop back down some pips and then move back up to the same level and it could happened several times. This level will become resistance and in the directly opposite direction a sell situation where the price in which the foreign currency is having some challenging yielding is known s the support level.

    It is the interpenetration of these levels that become trading signals for Forex traders to enter the trade as a continuation of the trend is traditionally imminent and a new resistance or support levels will be formed at the next technical level. Using resistance and support levels you do not just receive some indicators when to enter the trade, but as well you receive indicators where to exit the trade or even where to place their stop losses.

    It is considered to be normal for interpenetration of these levels to have the reverse effect - resistance becomes support and vice versa. Let’s try to understand it on the real example. The EUR/USD pair has reached a resistance level at the mark of 15000. It has been bashing up against this level for a couple of hours, so you have set an entry point to purchase the EUR/USD at 15011. Then the price is broken and it shoots up to around 15050 because the price starts so in order to lose momentum you change your stop loss for 15000. Here the strategy is that the once resistance level of 15000 will become support level doe the continued purchase trend.

    The most common method of trading the Forex market is used all the time together with other strategies for exiting and entering trades. You could see while you are manipulating your charts to different periods of time that these resistance and support levels are constantly repeated while the foreign currency is around the same price. As well you will be able to notice that round numbers like 15000, 16000, 17000 and so on almost always offer resistance and support. Such numbers are also known as psychological numbers due to the effect that they have on Forex traders purchasing and selling at these points.

    As in every other niche of life foreign exchange market needs some knowledge.

    Of course, one can start forex trading and get quite successful about it. But sooner or later the losses will come. This is when one might think "Why didn't I start with a good forex book?"

    That does not mean that after reading even the best materials you will start closing trading positions with huge income, but this knowledge will save you from lots of traps. And even if you make up your mind to get the assistance of a managed forex accounts service, still you will be able to make a much wiser decision.

    And some general tips - today the web technologies give you a truly unique chance to choose what you require at the best terms which are available on the market. Funny, but most of the people don't use this opportunity. In real life it means that you must use all the tools of today to get the information that you need.

    Search Google and other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to create a true vision of this market. Thus, giving you a real opportunity to make a smart and nicely balanced decision.

    Forex Trading Strategy - Resistance And Support

    Best Wishes,
    Kathleen Oz

  2. #2
    riteforu Guest

    Smile

    The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
    Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary. Our guide will tell you everything you need to know without using to much brain power.

    Forex Trading Guide For Beginners

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