how to draw support and resistance lines pdf

Support and resistance zones are a central when it comes to determining the level at which the price of a currency'southward substitution rate is likely to contrary.

It is something I incorporated in my trading almost since the get-go.

The trouble is, those zones can be very subjective. In most cases, a trader can usually simply approximate those supports or resistances.

I remember having a difficult time identifying the proper zones on my chart. I'd also become discouraged when I saw that other more professional person Forex traders identified amend or dissimilar zones on their chart.

I couldn't seem to get information technology…

Then, I began researching "how to depict back up and resistance". I came across a few articles, and fifty-fifty bought a Forex trading course on the topic.

I personally find the widely-bachelor advice on drawing the right zones to be very subjective. It doesn't lead anywhere.

I commencement read nigh using a line nautical chart to draw the proper zones. That helped a little:

But still, try it yourself and encounter if information technology works…

I nevertheless institute this manner to be slightly difficult to implement. Information technology is hard to distinguish the strong from the weak back up and resistance zones.

Slowly, I came upwardly with a different way to identify the zones. I realized that this new manner reduced confusion a lot. As an added bonus, it also gives a much clearer picture of how the market behaves.

A Powerful Way To Draw Support And Resistance Zones

The background story beingness given, let me outline the procedure I use to powerfully describe support and resistance areas.

one. Option your favourite chart type

This first footstep is really elementary and should exist complicated. The only thing you need to practise is to open up any nautical chart an choice the type you prefer. I utilise candlesticks but information technology's up to you to use whatever yous want.

Do it at present! Reading is ho-hum, I want you to employ!

two. Identify all swing highs and lows

Then, yous want to identify all the highs and lows you see on your chart. Y'all might need to scroll in the past a lilliputian bit.

I want you to put a line at every top and low you see. It should await like this:

The lines exercise not necessarily accept to exist at the complete low. The important thing hither is to depict a uncomplicated line at all lows and highs. It shouldn't be very subjective.

The powerful aspect of this pace is that you lot will be able to easily decide whether the market is in a trend or not since you will meet the highs and lows.

Equally you tin can see on the chart above, the market place isn't currently in a trend.

3. Add lines to connect the highs/lows

The last stride in cartoon back up and resistance zones consists of linking the highs and lows you identified with horizontal lines. Those will become your main support and resistance zones.

Here's what it looks similar:

There is almost no way that the lines you draw volition lie exactly on the highs and lows you lot identified. That is totally normal, be okay with it. Whenever yous feel you tin connect 2 highs/lows, add together an horizontal line.

One time you have completed this process, you can be confident that the lines correspond clear back up and resistance zones. You can always adjust your lines, but information technology shouldn't be necessary.

Let's compare…

In both cases, the lines drawn look similar. You can encounter that the line chart has 1 more lines. On my part, I prefer to keep things simple. I simply look for the primary support and resistance zones.