How To Find Support and Resistance Levels in Forex Market

Finding support and resistance levels on the forex market can be quite easy to draw because when  trader in determining the support and resistance level are based on the high points and low points that occurred in the previous market. In determining the points of support and resistance traders only need to find supporting data about previous market so that the support and resistance level on the next session can become predictable because of the possibility of the price to bounce will be occur at the next market session  is based on the last support and resistance data. When the price bounce on the same point many times can give a signal that is a strong point for support or resistance levels. A strong support and resistance can make the price bouncing many times at same place and more times the price bounces away from that point , the stronger signal confirmed for trader to open new order whether it short for bounce on the resistance and Long for bounce on support.

There are some tools that are commonly used to determine support and resistance points are:

1. Trendline

2. Fibonacci

3. Pivot Point

All of the three indicators above when used together may provide a different data about the support and resistance levels on the chart but the difference is only about 5-10 pips and sometimes can give the same area of the support and resistance levels. Everything is back again to you about how you think might be you trust and you know well enough in using it . Reliance on indicators that you use is indispensable here .

Here is an example of using the above 3 indicators in a chart :

Seen in the picture is marked with a red circle when all three of indicators these are  Trendline , Fibonacci and Pivot Point showed similar resistance levels though not exactly in the same place accurately and similarly too for the support area indicated by the blue circle so it can be deduced that all three of these indicators give almost the same results but more recommend if you use just 1 or 2 indicator to determine the level in order to reduce doubts happen if you using all three simultaneously.

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How to use and draw Fibonacci retracement as trading strategies

Using Fibonacci retracement as indikator in the trade is a smart choice because by using this indicator making you can put a limit order , stop order or even Instant order with very accurate placement. Fibonacci Retracement will draw the points of potential support and resistance when its drawn so that you can take advantage from it. Then there are some things that you must understand when You trade by using Fibonacci Fibonaaci below :

1 . Strong Fibonacci Retracement level at 38.2 % and 61.8 %

At this level a lot of retracement will happen often then many traders taking advantage of this moment because of support or resistance is formed at this level is very strong and gives a signal that the trend will continue after a pullback occurs.

2 . Trend reversal level at the level of 23.6 % , 50.0 % 76.4 %

At this level when the price is stop right on the level or not it seems the trend to be unable to continue and  likely that the trend will change so that traders need to make the next step after several other contributing factors confirmed as a sign of a trend change. Never use just one signal to making order. You need about three confirmed signal before making Your order.

You can see in the picture above potential retracement levels are marked in red and the potential reversal levels are marked in yellow . So based on the above principles you can try to take the opportunity to trade when price has break the Fibonacci level which is a reversal area and wait until the price comes on retracement level later then if price bounces on retracement point you can place an order in accordance of the trend candle direction whether the trend is up or down and do not ever try to making order when the price has not been entered retracement point because trend reversal will occur often so it is very risky to making order at that level .

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