Support & Resistance Level (help needed)

Hello everybody.
I've been testing indicator on my charts that shows Support, Resitance and Pivot level. Has anybody traded it this way using support and resistance? I read on babypips that if market price is below the pivot level then its selling and it will hit the support level 1 but it doesn't work that way, sometimes it goes down 50 pips below pivot level and goes up again. Can someone walk me through clearer with how to trade using support and resistance level. Please.

gbd/jpy123,
One way of using support and resistance would be to look for a role reversal (support broken becomes resistance and vice versa). Let's say the currency pair is in an overall downtrend and is correcting upwards. A good place to get short would be a former support area which will most likely act as resistance now. If this former support area also coincides with a pivot, fib or moving average, your chances of a high probability setup have increased. An aggressive entry would be to short right at the former support area, and a more conservative entry would be to wait for confirmation of the downtrend continuing by a bounce off of this area. I hope this helps you.

In using support and resistance level to trade,there two major things to identify,they are:1) U need to identify the position of the market using your indicators,ie You need to know if the market is going to Buy or sell.2)After identifing this you neeed to know at what side of the support or resisstance is the price.After identifing this two points:if the price is above the support or resistance, and your indicator says it is going to buy the most probable position to trade is buy,then you whatch out for the next support or resistance below and above.Depending on which chart you are using,either 1hour,4hours or daily chart,you now have to place your take profit at the next or the second support or resistance above your open position,and your stoploss at the next two or three support or resistance below your open position. If your indicator is pointing at sell,then the most probable direction is sell,you can now enter sell,targeting the next or second resistance or support for your take profit and the next or second/third support or resistance above for your stoploss.I use it and it works perfectly well.You should also Remeber that a broken support becomes a resistance,while a broken resistance becomes a support.dont be regid about it.NOTE:When placing your take profit,try and place it a little below the target rsistance or support,this is so because the support or resistance might cause a retracement and prevent it from hitting your target.When placing your stopploss ,place it a little beyond the target resistance or support,Chears and best of luck!Osueke Emeka

If you are interested in learning further about trading with pivot points, then I strongly suggest that you look into John Person's work. I trade with a Pivot Point strategy and can attest to their help in picking out probable turning points. Please remember when trading in the market, with whatever indicator you use: ANYTHING CAN HAPPEN. This goes for what ever system you trade, nothing is 100%. Pivot Points in my opinion are the best indicator at picking probable entry areas, and I strongly encourage you to research them further.

Go to www.actionforex.com and plot their daily pivot/fib levels and judge for yourself how the market moves related to these.

If you are new to trading do not open account with more than a couple hundred bucks that you will be sure to lose.

I use the resistance and support levels as break out points. When I see the market riding sideways again one or the other. I get ready for a breakout that can give me many pips. watch that pattern and see if you can pick those points. Hope this helps

Pivots are only one example of resistance/support, there are hundreds. My entire approach is based S/R and I wouldn't have it any other way. Get good at seeing other S/R levels and you'll see that pivots are only part of the picture.

At the time frame you're trading on you're going to have problems with random noise, news and big orders. I suggest you work on the daily TF and study your charts for "role reversals" as was brought up earlier, along with bounces and how breakouts progress and whipsaw.

Pay attention to stuff like:
Weekly and monthy pivots
Key moving averages
Fib confluence
Channels and trend lines
Previous breakouts and role reversals
Previous highs and lows

Ask yourself "if then" questions as you go. If X happens, what should I do? If Y happens, what should I do? etc, etc.