Here’s a trader question on the subject of support and resistance.
I am having trouble deciding where to draw support and resistance lines on a one day forex chart. To me it seems that you could go to extremes and draw support / resistance lines from every fractal. How do I decide which s/r levels are significant?
Support and Resistance is definitely a topic a lot of traders struggle withÂ – and not just new ones.
Technical analysts and traders will throw outÂ a lot of different things they say tell you what you should be looking at. They include highs and lows. They include moving average lines. They include Fibonacci and other projection/retracement levels. While it’s definitely true that if the market is focused on something as a key level, then it becomes a key level – a self-fullfilling prophecy.
Most of that stuff is really nothing more than a line on a chart, though. I personally prefer to look at where the markets have rejected prices, and also the attraction points because they absolutely play into the whole mix.
A little while back, I recorded a video highlighting the way I look at support and resistanceÂ toÂ describe whatÂ you shouldÂ have in mind what you’re really looking for to spot those levels. Check it out. I think itÂ could really open your eyes.