CHAPTER 2. SUPPORT AND RESISTANCE

Support Resistance (SnR) is used to determined the point/level of the entry. Strategi trading terbaik As I always said that SnR is like a station, where the bus or train usually stops for a moment before continuing the trip. The same thing happens in forex trading, SnR is the station of the price. 

Why should we consider SnR?

Because we know that SnR is an area where the price starts its moves. In simple words, we can minimize the risk (SL) by opening a position near the SnR. Besides, SnR will help us determine where the Stop loss (SL) should be. So I say that it is very important. 

May be there are some rules about SnR out there. In order to make the same perception, I tell you that we use SnR as REVERSAL. Now, keep in your mind, when you find SnR you must think about REVERSAL. Because we are gonna counter the price direction. For example, when the price is going up, and there is a resistance near the current price, then we must be ready for taking short (SELL). We don’t use SnR as break out or continuation, but REVERSAL only. In conclusion, in KEN FX TRADING SYSTEM, Support and resistance (SnR) means REVERSAL.

Here are the characteristic of good support and resistance:

1. Strongest and the best Support Resistance comes from High Timeframe. ie: Monthly, Weekly, Daily, and H4.

2. Strongest and the best support resistance are areas where there are many price bounces on that area.

Note: Please remember that support and Resistance is just “an area” not exact level/point.

But you don’t need to be paranoid about SnR. It is not that complicated. Let’s make it easy. As long as there is high/low in the past, it can be used as SnR. Yes it is that simple. Let  you take a look at this example;

It is very simple right? And what we need to do is wait for the next price near the support and resistance. We don’t need to use “too far” back history for drawing SnR.  Find only SnR who are near the current price. Well take a look at the example below;

Then, Where should we draw Support and Resistance line?

Well, buddy, Just use your imagination to put your SnR line. Put your Resistance ABOVE the recent price and put your support BELOW the current price. And below is the example how I draw SnR for EURUSD chart above.

Note: The current price must “between” the support and resistance. Then we wait for the price come close to either support or resistance.

When the price firstly touch the resistance, then we must be ready for the SELL setup. On the contrary, where the price firstly touch the support, the we must be ready for the BUY setup.

Well, now you have understood what support and resistance is. And you are now able to draw support resistance. Congratulation anyway.

Let’s go to the next chapter!!!!

Note: If you have a question related Support and resistance, please leave me a message through Facebook Group.