The problem is, those zones can be very subjective. I remember having a hard time identifying the proper zones on my chart. I came across a few articles, and even bought a Forex trading course on the topic. I personally find the widely-available advice on drawing the right zones to be very subjective. I still found this way to be slightly difficult to implement. It is hard to distinguish the strong from the weak support and resistance zones.
Slowly, I came up with a different way to identify the zones. I realized that this new way reduced confusion a lot. As an added bonus, it also gives a much clearer picture of how the market behaves. The background story being given, let me outline the process I use to powerfully draw support and resistance areas.
This first step is really simple and should be complicated. The only thing you need to do is to open any chart an pick the type you prefer. Then, you want to identify all the highs and lows you see on your chart. The lines do not necessarily have to be at the complete low. The important thing here is to draw a simple line at all lows and highs.
The powerful aspect of this step is that you will be able to easily determine whether the market is in a trend or not since you will see the highs and lows. The last step in drawing support and resistance zones consists of linking the highs and lows you identified with horizontal lines. Those will become your main support and resistance zones. There is almost no way that the lines you draw will lie exactly on the highs and lows you identified. That is totally normal, be okay with it.
Once you have completed this process, you can be confident that the lines represent clear support and resistance zones. In both cases, the lines drawn look similar.
You can see that the line chart has one more lines. On my part, I prefer to keep things simple. I only look for the main support and resistance zones. It is important to understand that this method works great on any time frame. The logic remains the same. You may say that this process gives the same result as identifying support and resistance zones through a line chart. In the end, whatever the process you use to identify the support and zones on your chart, make sure you are comfortable with it!
My name is Etienne Crete from Montreal, Canada. I'm a swing trader and help aspiring Forex traders develop a trading method that works for them so they can produce income allowing them to live with more freedom. I've interviewed the greatest figures of the trading world and consider it my mission to help you implement their advice!
My Account Log In. It is something I incorporated in my trading almost since the start. That helped a little: But still, try it yourself and see if it works… I still found this way to be slightly difficult to implement. Pick your favourite chart type This first step is really simple and should be complicated. Reading is boring, I want you to apply!
Identify all swing highs and lows Then, you want to identify all the highs and lows you see on your chart. I want you to put a line at every top and low you see. It should look like this: Some Important Notes It is important to understand that this method works great on any time frame. The more, the better. However, I find this process to be simpler and it helps identify the trend.More...