Support and Resistance help traders to find out spots where the market will take a reversal and it will also help us to put a safe stop loss and take profit. In this article, we will discuss Key points of daily support and resistance and a simple strategy to find daily support and resistance levels.
First of all, we have to find out daily Pin bars and Engulfing Pattern. Engulfing Bar is my favorite and widely used pattern. Let me show you how this works.
I have highlighted a daily engulfing pattern. Now we will use this bearish engulfing pattern as a strong resistance.
We have to draw two horizontal lines on the high point of engulfing bars. I mean high point of candlewick and vice versa. These two lines will act as fresh support or resistance in the future.
After Finding out Daily support and resistance Level Then we will look for a pin bar on intraday chart M15. This will give a good risk-reward trade.
Simply to follow three steps for strong support or resistance
- Open daily chart and look for a fresh engulfing candle
- Draw a zone from highs or lows of engulfing candle-like shown above
- On the intraday chart, wait for price action at the zone.
I have shown both intraday and daily chart examples. In the next article, I will show you Daily pin bar support and resistance and how to trade on an intraday chart.
Simple But Effective Technique
Note: All the viewpoints here are according to the rules of technical analysis. we are not responsible for any type of loss in forex trading.