Hello friends how are you I hope all is good. Recently I have been trying to learn how to read forex charts, watching many educational videos on youtube, and practicing on tradingview so I will be sharing what I know so far. First thing when you open your chart on any asset before start trading is to identify the levels of support and resistance.
What are support and resistance? Its levels or better yet areas where market price has reacted before in the past and has the potential to react on that level again in the future. What do we need to look for to identify these areas of support and resistance?
- Looking for the highest and lowest points that the market has reached in recent time.
- To have two or more rejections on SNR levels and when touches the level the move away should be big and in the opposite direction.
- SNR levels should be obvious. That means you should spot the levels right away when you open the chart of the asset.
- The levels/areas need to be recently formed or respected meaning the price has reached the level and then retracted.
Support and resistance levels are very important that's why we must draw them to be our reminders because once the market gets back to these levels we have trading opportunities that are coming and we want to be ready.
This post is not investment advice, it's only my personal understanding of the technical analysis of the market.