how to Take First Learning Step in Forex Trading

ecome supporore often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support i a support or resistance level breaks, the strength of the follow-through move depends on how strongly

ith 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

Trend lines are probably the most common form of technical analysis in forex trading. They are probably one of the most underutilized ones as wedrawn 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 aroun their most basic form, an uptrend line is drawn along the bottom of easily,

If we take this trend line theory one step further and draw a parallel line at the same angle of the uptrend or downtrend, we will have created a channel. No, we’re not talking about ESPN, ABC, or Cartoon Network.

Still, this doesn’t mean that you should walk away like it’s a commercial break- channels can be just as exciting to watch as America’s Next Top Model or Entourage!

Channels are just another tool in technical analysis which can be used to determine good places to buy or sell. Both the tops and bottoms of channels represent potential areas of support or resistance.

To create an up (ascending) channel, simply draw a parallel line at the same angle as an uptrend line and then move that line to position where it touches the most recent peak. This should be done at the same time you create the trend line.

To create a down (descending) channel, simply draw a parallel line at the same angle as the downtrend line and then move that line to a position.

When prices hit the bottom trend line, this may be used as a buying area. When prices hit the upper trend line, this may be used as a selling area.

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When constructing a channel, both trend lines must be parallel to each otherrally, the bottom of channel is considered a buy zone while the top of channel is considered a sell zone.

Like in drawing trend lines, DO NOT EVER force the price to the channels that you draw! A channel boundary that is sloping at one angle while the corresponding channel boundary is sloping at another is not corre.

Now that you know the basics, it’s time to apply these basic but extremely useful technical tools in your trading. B

we want to make things easy to understand, we have divided how to trade support and resistance levels into two simple ideas: the Bounce and the Break.