Support, Resistance

[moynul]

Hello Dennis carr

Hope you well. I read the news but i want to know what should we take in to account when you mention support and resistence figur? like this weeks eur/usd. I did have some lesson from the vidoe session of yours long ago and it was great and Its been quite a long time and became busy in my office.
Please can You explan me with the example of recent news eru/usd so it can be more easy 4 me.:cool:

[Dennis]

Hello Moynul

I am very well thanks: full of the joys of spring.

First thing to do is take a look at Charts, Trends and Lines in ColtFX Mod1.

Basically when we say a pair will find resistance at a price it means that we think price will rise to this level and then fall because this is what it has done in the past. Likewise, when we say the pair will find support at a price, we think that price will fall to this level and then rise because that is what it has done in the past.

Once you have identified a good level of res/sup, you need to monitor it, waiting for the opportunity to act.

Take a look at C1. EUR/USD had found resistance at around 1.49 three times since Dec 2007. At the same time, the level where price found support rose each time.
The two lines together form what is called an ascending triangle and the trader waits for a breakout on the upside before going long. The target will then be the width of the triangle (arrow)

You need to decide what constitutes a breakout. Although EUR has encountered strong resistance @ 1.49, it's reasonable to wait until the daily candle closes above the psychological level of 1.50.

Now C2
Price breaks out of 1.50 on Feb 28. You open at 1.5115; S/L a touch below 1.49 with a TP (see 2nd arrow) around 1.55. If you hold your nerve a few days your target is hit on March 12th.

Easy in retrospect, I know, but I hope it's a clear example.

[KaiyureBoy]

I tried some possibilities ( etc.) but with no success.
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[Dennis]

Hello Kaiyure Boy

Thanks for posting on the site but you'll have to be a bit more specific with your comment for me to respond appropriately.

A minor point: what's with the links in your signature?