Price action is naked chart so no need any indicators to analyze forex market. More big time frame more data that we can see so off course it would be more accurate enough. My simple analyze on seeing strong support and resistance based on price is like on pictures below :
You can see red line on picture above that reflection of strong resistance. Many forex traders call that "key level".
One thing to note is that the support and resistance areas aren’t exact, meaning that it is a general zone and not an exact spot on the chart. The zone could be as wide as 10-15 pips or even as wide as 50 pips on some charts. Just know that it is a general zone and not a precise area.
A quick way to identify support and resistance zones is to look on a chart and find a level on the chart where prices have closed right above or right below and draw a line there. For example if on a chart the candles have previously closed right above the 1.2500 price multiple times then you know that at around 1.2500 on that chart is a support zone. Then later when the price reaches that 1.2500 level again you know that it has reacted as support before and you can expect it to respect it again.
In the chart above you can see that the resistance zone turned into
support zone. This shows that this zone is a very good one and that it
is a very good zone to trade off of. The more the zone acts as support
and resistance the stronger the zone will be.
When the wicks pierce through the support and resistance zone and then close below it shows that the market pushed the prices back down .That means it has respected that certain level on the chart as a support and resistance area.
When prices reach a support and resistance zone they aren’t going to turnaround immediately, it might take its time than turnaround. Also price doesn’t have to fully reach the line because it is a zone remember.
Prices aren’t always going to respect these zones but they are going to most of the time and we can take advantage of that. By knowing that more time than not the price is going to respect the zone we can use that information when trading to help figure out what the market is going to do next.
When prices get near a support and resistance zone you should be looking for a price action trade setup. These setups could include a pin bar, engulfing bar or an inside bar. These setups will help determine whether the price will reverse or keep on going through the zone.
For example if a pin bar formed right at a support zone then you should expect that the price is going to go back up. A pin bar is a reversal pattern and this would mean that the prices would bounce off of the support zone and go back in the opposite direction that it came.
You can see red line on picture above that reflection of strong resistance. Many forex traders call that "key level".
Easy way to identify support and resistance
Identifying support and resistance zones on a chart is a very simple task. You look for places on the chart that the price has previously respected and you draw a horizontal line where that is. Then later when the price nears this zone you know that it has acted as a hot zone in the past.One thing to note is that the support and resistance areas aren’t exact, meaning that it is a general zone and not an exact spot on the chart. The zone could be as wide as 10-15 pips or even as wide as 50 pips on some charts. Just know that it is a general zone and not a precise area.
A quick way to identify support and resistance zones is to look on a chart and find a level on the chart where prices have closed right above or right below and draw a line there. For example if on a chart the candles have previously closed right above the 1.2500 price multiple times then you know that at around 1.2500 on that chart is a support zone. Then later when the price reaches that 1.2500 level again you know that it has reacted as support before and you can expect it to respect it again.
As you can see below the candles
below have either right below or right above the support and resistance
zones. You can also see that the wicks protrude through the zone which
means the market went through the zone but then it got pushed back down.
This shows the market is respecting the zone
When the wicks pierce through the support and resistance zone and then close below it shows that the market pushed the prices back down .That means it has respected that certain level on the chart as a support and resistance area.
When prices reach a support and resistance zone they aren’t going to turnaround immediately, it might take its time than turnaround. Also price doesn’t have to fully reach the line because it is a zone remember.
Prices aren’t always going to respect these zones but they are going to most of the time and we can take advantage of that. By knowing that more time than not the price is going to respect the zone we can use that information when trading to help figure out what the market is going to do next.
How To Use Support and Resistance Zones When Trading
Support and resistance zones can be used to help when trading because we know how the market has reacted to these zones before and that they are probably going to do the same thing. Now this isn’t always the case but it gives us an idea as to what might happen next.When prices get near a support and resistance zone you should be looking for a price action trade setup. These setups could include a pin bar, engulfing bar or an inside bar. These setups will help determine whether the price will reverse or keep on going through the zone.
For example if a pin bar formed right at a support zone then you should expect that the price is going to go back up. A pin bar is a reversal pattern and this would mean that the prices would bounce off of the support zone and go back in the opposite direction that it came.
This chart is a great example of a
pin bar reversal pattern. Price goes through the support zone but then
gets pushed back up and closes above it. This shows that the market
rejected lower prices. A new uptrend was then started after the pin bar.
There are many other price
action trade setups that can occur at support and resistance zones and a
pin bar is just one of them. When trading just know to look for a trade
setup when prices get near a support and resistance zone. This will
give you a better chance at having a successful traders. I've hope this article about easy way to identify support resistance using price action can make as a traders more stable on getting profit from forex market.
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