Trade entries: Using Intraday Forex Support and Resistance to Maximise Risk:Reward
In order to find entries, I finally zoom into an intraday chart and use short term support/resistance.
I do this to make sure all time frames are lined up and telling us to trade in the one direction. It also allows us to get the best risk:reward possible.
Example Long Entry on USD/JPY
Remember the higher time frame analysis we already did on USD/JPY? As price was above higher time frame support, we were looking only to long.
Now take a look at the intraday price action when price came back to retest daily support, on the hourly:
How to Enter a Long Forex Trade Using my Simple Forex Support and Resistance Trading Strategy
- Wait for price to retest and then hold daily support.
- Find the first area of short term resistance (a red hourly candle above the daily zone) and draw a short term zone.
- When price retests the short term zone, go long.
- Place your stop below the intraday zone if you're aggressive or below the daily zone if you're conservative and target 1:3 risk:reward.
Do the opposite for a short entry if the daily chart is below resistance.
You can also see on the USD/JPY example above, that price gave you a second chance to double down and compound your profits.
If you have any questions around using intraday support and resistance to find entries with maximum risk:reward, then leave a comment below and I'll be happy to have a chat.
Best of probabilities to you,
Dane.
FOREX BROKR | LeoFinance Blog
Daily market analysis and education.