how to Take First Learning Step in Forex Trading

Notice how the shadows of the candles tested the 1.4700 support level. At those times it seemed like the market was “breaking” support.

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There is no definite answer to this question. Some argue that a support or resistance level is broken if the market can actually close past that level. However, you will find that this is not always the case.

In this case, price had closed below the 1.4700 support level but ended up rising back up above itu had believed that this was a real breakout and sold this pair, you would’ve been seriously hurtin’!

Looking at the chart now, you can visually see and come to the conclusion that the support was not actually broken; it is still very much intact and now even stronger.

To help you filter out these false breakouts, you should think of support and resistance more of as “zones” rather than concrete numbers.

One way to help you find these zones is to plot support and resistance on a line chart rather than a candlestick chart. The reason is that line charts only show you the closing price while candlesticks add the extreme

These highs and lows can be misleading because often times they are just the “knee-jerk” reactions of the market. It’s like when someone is doing something really strange, but when asked about it,

When plotting support and resistance, you don’t want the reflexes of the market. You only want to plot its intentional movements.
Looking at the line chart, you want to plot your support and resistance lines around areas where you can see the price forming several peaks or valleys.

With a little practice, you’ll be able to spot potential forex support and resistance areas easily. In the next lesson, we’ll teach you how to trade diagonal support and resistance lines, otherwise known as forex trend line

Trend lines are probably the most common form of technical analysis in forex trading. They are probably one of the most underutilized ones as well.

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If drawn correctly, they can be as accurate as any other method. Unfortunately, most forex traders don’t draw them correctly or try to make the line fit the market instead of the other way around.

In their most basic form, an uptrend line is drawn along the bottom of easily identifiable support areas (valleys). In a downtrend, the trend line is drawn along the top of easily identifiable resistance areas (peaks).

akes at least two tops or bottoms to draw a valid trend line but it takes THREE to confirm a trend linEPER the trend line you draw, the less reliable it is going to be and the more likely it wirizontal support and resistance levels, trend lines become stronger the more times they are tested.