how to Take First Learning Step in Forex Trading

And most importantly, DO NOT EVER draw trend lines by forcing them to fit the market. If they do not fit right, then that trend line isn’t a valid one!

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 ,

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

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 where it touches the most recent valley. This should be done at the same time you create the trend line.

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.

enerally, 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

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

Many retail forex traders make the error of setting their orders directly on support and resistance levels and then just waiting to for their trade to materialize. Sure, this may work at times but this kind of trading

method assumes that a support or resistance level will hold without price actually gemight be thinking, “Why don’t I just set an entry order right on the line? That way, I am assured th

When playing the bounce, we want to tilt the odds in our favor and find some sort of confirmation that the support or resistance will hold.

Instead of simply buying or selling right off the bat, wait for it to bounce first before entering. By doing this, you avoid those moments where price moves fast and break through support and resistance levels. From experience, catching a falling knife when trading forex can get really bloody…

In a perfect world, support and resistance levels would hold forever, McDonald’s would be healthy, and we’d all have jetpacks. In a perfect forex trading world, we could just jump in and out whenever price hits those major support and resistance levels and earn loads of money.