Support and resistance level are an important part in your Forex learning. If you want to know when the price level is going to up and going down in Forex, there is no better way than using your knowledge of support and resistance. A lot of traders have made money in Forex by using the simple knowledge of this support and resistance in Forex. If you are thinking that knowing only one type of support and resistance can make your career in Forex, you are not thinking right. This market is volatile and you need to know how to make the best use of Forex trading. If you use only one support and resistance level, you will not have a chance to compare your findings with the other support and resistance level to check if they are all right. Traders who have been in Forex for a long time, they always check their information by analyzing the market many times. The more knowledge you have in Forex support and resistance level, you are going to make more money.
Different patterns give complete ideas
We know that the Forex and CFD market can be volatile at any time. It is not possible for the traders to predict when this market is going tube volatile. The man function of Forex is to make money and you make money by selling currencies at a higher price. If you know only one support and resistance level, you have incomplete knowledge about this part. Most traders who are making money consistently in Forex knows many different strategies of support and resistance. If you think knowing only one pattern of support and resistance bars will make you rich in Forex, you need to learn many different types.
For example, there are many strategies in Forex. Not all strategies are used by the professional traders and they use only one strategy. It is because they have mastered this one strategy and they can make money. But if you look at how they analyze the market, you will find that they are using many support and resistance levels patterns. They do not stick to any patterns but using many of it. When you are using more than one patterns, there are chances that you are making a more thorough analysis of the market. When you know where the money is, things are going to get easy for you to make money.
Major support levels: Major support levels are very crucial for currency trading. The expert trader’s always executing their trade at the major support levels using the price action signal. Though price action trading signal is very profitable it’s not mandatory that you should use this. You can also develop your trading system based on simple indicators readings. But don’t make things too complex since it will give you too much information which might compel you take a wrong trading decision.
Minor support levels: Minor support levels are also very important for precise trade execution. You can reduce your stop loss size in Forex market by using the multiple time frame analysis. But before you start trading the lower time frame you need to understand the associated risk in lower time frame trading. Majority of the novice traders lose a huge amount of money just by trading the lower time frame. The lower time frame should help you to find precise trade entry but your overall trading decision should be taken based on the higher time frame data.
Things to remember
Currency trading is only easy if you know how to do it. You need to learn about the support and resistance level so that you can trade with confidence. Never consider this sector as a shortcut way to become a millionaire. Consider trading as your business and develop a strategic plan to deal with the losing trades. Last but not the least, only trade with the market trend.