Long or Short: Using Higher Time Frame Support and Resistance to Decide Direction
So here we are at the most important part of this free forex trading course. The part where we put everything we’ve learned about support/resistance zones and candle patterns together to make some money.
In this section, you'll learn how to enter the market using my simple forex support and resistance trading strategy.
Higher time frame is king
While the higher time frame charts may be slow, they are the most significant. There is no taking shortcuts to speed up the process. We take what the markets offer.
As a result, your first step to trading these types of setups is to always start on the daily chart and identify higher time frame forex support and resistance zones that are in play.
By in in-play, all I mean is that price is currently close to them and the zone may be soon touched.
Long or Short?
If price is above higher time frame support then you should be looking to buy (trade long).
If price is below higher time frame resistance, then you should be looking to sell (trade short).
Simple enough, right?
Now let's take a look at a real world example from a USD/JPY long trade we took on this LeoFinance blog a few weeks ago.
Here's the USD/JPY daily chart as price pushed down toward higher time frame support:
You can see that this higher time frame support zone is significant because price has pinged higher off it twice in the past.
Because we're above higher time frame support here, the next time that price approaches it, we want to only be thinking about buying.
By taking this approach, we ensure we remain on the same side of the market that the big flows are on.
Remember, higher time frame is king!
While we could just blindly buy the market now, we're going to use the intraday charts and price action techniques we've learned in this course to refine our entry.
If you have any questions around using higher time frame support and resistance to keep you on the right side of the market, then leave a comment below and I'll be happy to have a chat.
See you tomorrow where I finally go over the trade entry section of the strategy.
Best of probabilities to you,
Dane.
FOREX BROKR | LeoFinance Blog
Daily market analysis and education.
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This is a great lesson and one tip given for free. I don't usually trade, mostly I buy as a long term investment, but I want to try to do this more often. And such practical examples with higher time frame allows me to put some strategies in place and also do my own things.
I don't have a great appetite for risk, I am more like an ant and want to gather everything that I can and this strategy provided some insight to try it out.
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Day trading actually allows you to manage your risk a lot better than by simply buying and holding.
When you day trade, you're able to define your risk perfectly and set stop losses that only ever let you lose small percentages of your account if you're wrong. Even better, it allows you to target much larger percentages than you risk on each trade.
Wait for the money management section of the guide and I'll go over this in more detail.
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I'll need to get back to the earlier lessons here. Although I don't day trade, I would love to understand the concepts to buy assets at the best possible price, and don't get caught in the fomo.
Really well explained.
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All posts about my simple forex support and resistance trading strategy, will be consolidated on that one page for easy reference when I'm finished.
Tomorrow's blog will talk about how I take entries with low risk and high potential reward. Check it out if you get a chance ;)
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Excellent, I'll check it out.
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Awesome. Is there any relationship as per analysis of Forex trades and day-trading crypto?
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In terms of technical analysis (the chart patterns that I use in this strategy), there is no difference between forex and crypto.
A market is a market is a market and the principles of supply/demand apply to all.
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Thank you!
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I bet you had a busy last few days with all the volatility, it looked like a lot of price action with some of the popular pairs on my feed.
EUR/USD
1.1786
-0.0033(-0.2784%)
10-Yr Bond
0.9720
0.0000(0.00%)
Vix
24.44
-1.31(-5.09%)
GBP/USD
1.3263
-0.0005(-0.0339%)
USD/JPY
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I understand very little about this topic. But that one spending time reading each lesson will learn.
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Thanks for stopping by Celi.
Day trading can seem tough if you're just starting out. But worth learning if you're genuinely interested.
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