The terms support and resistance can be a little
confusing to some traders. Many people instantly think of the wrong thing. For example,
I bet many traders instantly thought of those generic indicators that you put on your charts.
Those indicators that supposedly put those pivot points, S1, S2, S3, R1, R2, R3 automatically on
your charts for you.
This is not what I call support and resistance. All
they are, are just basic, static formulas.
Sure, occasionally the price will hit these
areas and bounce off of it. But for the most part, it is purely
Quite frankly, if you want to trade support and
resistance, you are going to have to be able to see it for yourself.
Follow these forex
trading tips. This process begins by getting rid of every single indicator that you are used
to using. This must feel like a giant leap of faith to many traders, but trust me, it's an
important step that you have to take.
Don't feel bad, if you have a difficult time with
this. It's only natural. After all, you are most likely stepping out of your comfort
I know exactly how you feel because when I first
started trading, I was the king of indicators. You name it, I used it. I thought the more
indicators you used the better your chances are of succeeding. Aww....newbies. We
all go through these growing pains.
But when you actually begin trading without
indicators, it's a very liberating feeling, and one thing becomes crystal clear: Based on
price action patterns, you can see with your own eyes that the market has an
energy, and you can spot natural support and resistance areas.
It may not evident right away, but if you really
stick with it and have patience, eventually you can't help but notice it. After all,
that is what forex trading system is all about.
And, what's even more amazing is that there are
actual fundamental reasons why these support and resistance areas work.
The best metaphor I can give you is trading price
action is like seeing an ex-ray of the market. You get to see the actual structure
of it, and what makes it really tick.