Support and resistance (SR) areas are a core part of my price action trading strategy. For 17 years I have been using SR on a daily basis to find powerful setups and prevent myself from taking risky trades.
Trading without SR areas is like driving blind – no matter what strategy you use, SR areas will be extremely useful and informative for your trading.
Check out this example at 5:25 on NZDUSD which highlights just how impactful SR can be.
In this live trading session I go over a whole range of benefits that SR areas give you as well as how to place and use them to their full potential. Doing so in an effective way is vital to your success as a price action trader.
3 Simple Steps to Place Support & Resistance
Placing SR should be a simple process that takes up only a little of your time. Agonizing over the placement of SR can be a time sink and often leads to over thinking.
When it comes to SR, the most obvious areas will be the most powerful. This is because a large portion of traders will also see these levels and react to them.
So any obscure or minor SR you place and then look to trade from can actually cause more lost trades.
I have condensed the process of placing SR areas into three easy to follow steps that will help you streamline your time spent as well as finding the most powerful support and resistance.
- Open a daily chart and zoom out until you see 3-4 months of candles.
- Place an area at the top and bottom most extreme bounces.
- Add areas between the top and bottom most by connecting the dots.
I strongly recommend heading over to 13:25 in the live session for my detailed run down of these steps.
Reading how to do something is often far different to physically doing it. Practice placing SR areas and you will improve – it’s as simple as that. You can always check your SR against my own SR.
Head on over to 23:15 in the session and you can watch me go through the step by step process on USDJPY.
What About Messy Pairs?
Now, as much as placing SR areas is easy there are times where price can get pretty messy. This is where most traders start to struggle when it comes to placing their SR.
It’s important to remember the fundamentals. Nothing changes when it comes to messy pairs and practicing is really going to boost your confidence when placing SR areas.
I go over some very messy pairs in this live session, one of which is at 27:23 on GBPUSD. This pair has been extremely messy due to Brexit so it is a fantastic recent example that we take a detailed look at.
I also go over a few different tricks we can use to make placing SR areas easier and much more precise.
Using different time frames is one of the simplest ways to do this. It is also applicable to anything you trade so can be used in any tradeable market, not just forex.
Head to 35:20 to watch how I use the different time frames to get a clearer picture of where to place SR.
Overall, you can excel at placing support and resistance quite easily by practicing every few days. You will be surprised at how confident you will become after just a few sessions of concentrated practice.
A big thank you to everyone that attended the live session. These live training sessions have been a big hit this year so I will definitely see you at the next one! Check this page for all my future public webinar times and dates!
Below I have put a short list of further highlights from the webinar that I think you should catch: