Forex Supply and Demand: Simple Support/Resistance - ForeXposed

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Friday, March 17, 2017

Forex Supply and Demand: Simple Support/Resistance

After studying price movement when a correction happens on forex market using Fibonacci Levels as a tool, there is another simple tool namely support and resistance line. This time I tried to give an example of support/resistance to assist in placing entry position accordance with the trend.
Forex Supply and Demand: Simple Support/Resistance
Knowing that the USD/CAD is on long down trend conditions, then the logical decision is to act as a seller. Note the row of momentum on H4 frame (tick mark), the momentum like this suffices as a reason for choosing sell side. After experiencing a downtrend, the price movement entered long enough consolidation conditions (turquoise shading). If you see these sorts of conditions and have doubts to take the position, STAY OUT. Better to wait until the prices show a clearer direction.

After trying several times, eventually, slowly but sure, the price penetrating support defense (down arrow), this so-called Barrier Trickle on forex trading. Notice how the shape of a small candle penetrated the support and then gather all momentum to breaking the support completely. The entry above is an entry when the prices return to visit the previous support level which now has turned into resistance.

You can use anything as a tool, the most important is to understand the forex market conditions in advance (trending, consolidation, or reversal). What should also be understood as a forex trader is we don't have to chase every single pip, if the entry we have opened is in accordance with the trend then we have reduced risk factors, because every forex trade could be a winning trade or losing trade. So the only can be done is minimize the risk by trade on conditions that have a higher probability.


Confluence Area

We can combine support/resistance line and Fibonacci levels at once. If you find a constant line (support/resistance, supply and demand zone, Fibonacci, pivot point, etc.) nearby to each other, then the area can be a difficult area to penetrate. Like the example below (The Open Position ini this forex demo is just examples as material to learn to trade forex):

Forex Supply and Demand: Simple Support/Resistance

  • A combination of Supply and Demand zone and Fibonacci:
Forex Supply and Demand: Simple Support/Resistance
  • Simple support/resistance line:
Forex Supply and Demand: Simple Support/Resistance
  • Simple Fibonacci level:
Forex Supply and Demand: Simple Support/Resistance