Thread: 2) Support & Resistance Assignment - PLACE A TRADE

Assignment : Based on what you have learned about determining Support and Resistance levels, select a chart on a currency pair of your choosing. Then, using a 1 hour time frame or longer, draw the appropriate Support and Resistance lines on the chart. Reply to this thread telling us where you would consider taking a trade. Be sure to note on your chart the point at which you would open the trade, place a stop, and take profits at. Feel free to upload an image of the chart with your lines drawn on it. (If you need help posting a chart, watch this short VIDEO.)

Hi All, Here is my support and resistance trade.The reason for opening this trade would be after the third touch the price has hit and reversed of the falling trend line . I would of opened short as per the chart. 1:2 Risk reward and stoploss just above the falling trend line.

Originally Posted by pipstealer

Hi All, Here is my support and resistance trade.The reason for opening this trade would be after the third touch the price has hit and reversed of the falling trend line . I would of opened short as per the chart. 1:2 Risk reward and stoploss just above the falling trend line.

You have the right idea...you'll notice the trade would have gone nowhere but sideways for a couple of months. This can be a challenging to ride out the trade. I would suggest taking the same concept and applying it towards a strong trending currency pair. When you trade the strongest trends, your aligning yourself in the direction of a prevailing trend but simply using support/resistance to help time an entry.

Maybe this one would of been a better trade, i am trying to mix the pairs i post up a bit so i am not looking at the same chart over and over.

Originally Posted by pipstealer

Maybe this one would of been a better trade, i am trying to mix the pairs i post up a bit so i am not looking at the same chart over and over.

Sure, I see what you are saying. However, trading the strongest trends allows you to hit your profit target or stop loss level sooner so you can move on to the next trade.

The EURUSD has certainly been in a strong downtrend and you can see it reached the profit target much quicker.

Good job!

Thanks Jeremy.

Originally Posted by pipstealer

Thanks Jeremy.

You are welcome and I will see that Jeremy receives your thanks.

Dear instructors

Not sure if this is the right thread to put this question

As we all know EUR/CHF fall to all time low and keep declining.

I still remember it was @1.39 when I was hesitating to enter short. Now I regret not to do it just because I thought it's maybe near bottom, plus the news that SNB might intervene. Well, it's 400 pips down from there

It'll be great if instructors could share some thought here, when we deal with this situation where there is no clear support level (as it's all time low), would you stay on the sideline? otherwise how would you see the entry into the trade without clear view of where the next support is?

Thanks

Originally Posted by piri

Dear instructors

Not sure if this is the right thread to put this question

As we all know EUR/CHF fall to all time low and keep declining.

I still remember it was @1.39 when I was hesitating to enter short. Now I regret not to do it just because I thought it's maybe near bottom, plus the news that SNB might intervene. Well, it's 400 pips down from there

It'll be great if instructors could share some thought here, when we deal with this situation where there is no clear support level (as it's all time low), would you stay on the sideline? otherwise how would you see the entry into the trade without clear view of where the next support is?

Thanks

I would stay on the sidelines. I actually removed the pair from my London Calling videos a few months ago because of the central bank interventions. Technical analysis will not work as well under these conditions which is why IO would suggest avoiding the pair and looking for other opportunities.

I am waiting for a long opportunity near 1,59 level in GBPCHF daily. My stop loss can be posted at 1.5770 and my exit coult be4 at 1,6200.

Any comment?

Originally Posted by alejandrofx

I am waiting for a long opportunity near 1,59 level in GBPCHF daily. My stop loss can be posted at 1.5770 and my exit coult be4 at 1,6200.

Any comment?

That is a valid trade idea. The daily chart shows prices in a larger range. Looking to buy near the support is a good plan. Well done on maintaining at least a 1 : 2 risk to reward ratio.

My homework is as follows: Looking at the EURO/USD daily chart we see that the pair has been trading upward during the periods of 05/08/2008 through 12/02/2009. The price action is making new highs and new lows and it is above the 200sma which is also going in an upward direction. I decided to add the RSI indicator, to find a hidden support in the market. I added a support line to the RSI chart. As we can see, as the RSI meets support or is near it, it will have been a good opportunity to buy. I am going to enter long on the third circle on 07/30/2009. I used the 4 hour chart to tune my entrance. In the 4 hour chart we find that in that date, using RSI, this indicator has just cross up of its oversold condition. In the price chart we see that the prices are piercing the 200sma line and retracing, closing above this line. I will enter this trade long, on the green candle after the Doji formation placing my stop below the low of the lower wicks. So I will enter long at 1.40695 with stop at 1.39982 and limit order at 1.42122.

Originally Posted by maria-o-ch

My homework is as follows: Looking at the EURO/USD daily chart we see that the pair has been trading upward during the periods of 05/08/2008 through 12/02/2009. The price action is making new highs and new lows and it is above the 200sma which is also going in an upward direction. I decided to add the RSI indicator, to find a hidden support in the market. I added a support line to the RSI chart. As we can see, as the RSI meets support or is near it, it will have been a good opportunity to buy. I am going to enter long on the third circle on 07/30/2009. I used the 4 hour chart to tune my entrance. In the 4 hour chart we find that in that date, using RSI, this indicator has just cross up of its oversold condition. In the price chart we see that the prices are piercing the 200sma line and retracing, closing above this line. I will enter this trade long, on the green candle after the Doji formation placing my stop below the low of the lower wicks. So I will enter long at 1.40695 with stop at 1.39982 and limit order at 1.42122.

Your analysis is excellent and your stop is well placed just beneath the low of the Doji. Your risk to reward is also favorable. Nice work.

Matt thank you for your reply and your comments.

Originally Posted by maria-o-ch

Matt thank you for your reply and your comments.

You're welcome.