Long or Short: Using Higher Time Frame Support and Resistance to Decide Direction
So here we are at the most important part of this free forex trading course. The part where we put everything we’ve learned about support/resistance zones and candle patterns together to make some money.
In this section, you'll learn how to enter the market using my simple forex support and resistance trading strategy.
Higher time frame is king
While the higher time frame charts may be slow, they are the most significant. There is no taking shortcuts to speed up the process. We take what the markets offer.
As a result, your first step to trading these types of setups is to always start on the daily chart and identify higher time frame forex support and resistance zones that are in play.
By in in-play, all I mean is that price is currently close to them and the zone may be soon touched.
Long or Short?
If price is above higher time frame support then you should be looking to buy (trade long).
If price is below higher time frame resistance, then you should be looking to sell (trade short).
Simple enough, right?
Now let's take a look at a real world example from a USD/JPY long trade we took on this LeoFinance blog a few weeks ago.
Here's the USD/JPY daily chart as price pushed down toward higher time frame support:
You can see that this higher time frame support zone is significant because price has pinged higher off it twice in the past.
Because we're above higher time frame support here, the next time that price approaches it, we want to only be thinking about buying.
By taking this approach, we ensure we remain on the same side of the market that the big flows are on.
Remember, higher time frame is king!
While we could just blindly buy the market now, we're going to use the intraday charts and price action techniques we've learned in this course to refine our entry.
If you have any questions around using higher time frame support and resistance to keep you on the right side of the market, then leave a comment below and I'll be happy to have a chat.
See you tomorrow where I finally go over the trade entry section of the strategy.
Best of probabilities to you,
Dane.
FOREX BROKR | LeoFinance Blog
Daily market analysis and education.