Is the market bend strong enough to scream at you to take it?

In this episode of Truth About FX, Walter gives some insider information on the best and easiest way to see support and resistance zones. He describes three important keys on catching support and resistance zones and choosing which candle to use.

Download (Duration: 05:47 / 6.63 MB)

In This Episode:

01:01 – trouble

03:14 – guided principle

04:24 – double bottoms

05:02 – x-ray vision

Tweetables:

Look for those sweet spots where you see repeated support and resistance. [Click To Tweet].

The best thing to do is to keep it simple.  [Click To Tweet].

Take the trade if the chart gives a good pattern. [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. How is it going, man?

Walter: Pretty good. How are you today, Hugh?

Hugh: Pretty good. Alright, today’s question is: What is the best way to draw support and resistance levels on your chart?

Walter: This is something that comes up. The two things that come up with Naked Trading is —  because there’s, basically, isn’t any other things to worry — how you draw support and resistance zones and which candle should I be using?

Should I use the GMT midnight close candles or the five New York time? Really, that’s it. The main question that comes up, because you are not fine tuning indicators, but here is what I would suggest if you are having trouble.

There’s a couple of things to keep in mind. Keep your mind to these three things: one is they should really jump out at you. When you are looking to find support and resistance levels on the chart, they should jump out at least, super obvious.

The easiest way I know how to see these zones in an obvious way is to move up to a higher timeframe. If you are trading the one-hour chart, move up to the four-hour chart and look for those places where you see repeated support and resistance.

In the shownotes of this episode, I’ll link up a video for you so you can see how I view it and maybe that’ll give you a way for you to fine tune your own way by identifying these. The easiest thing to do is think where are the very best spot on the chart where the market has repeatedly found support and resistance?

Now, obviously, sometimes you are going to see spot where the market has found like the top and it hit the top and that it’ll pull away so it’ll find support and resistance. And, likewise, sometimes you’ll find a bottom where the market puts you to bottom and you only found support.

Those are also going to qualify zones because market will get back there and it often does. But, usually, 99% of the time, what you are looking for are support and resistance over and over again. If you look at the higher timeframe chart, that’ll help.

Number two is use line the chart so look for those little bends ...