Trading with Simple Support and Resistance

I'm starting this thread to track my trades using simple analysis of support and resistance. I've set up a trade explorer to show a live IBFX account I have going; this is the account I'll track using this thread.

Basic Style:
My trading style revolves mostly around using major horizontal support and resistance zones and trend lines. I sometimes support this by using Fibonacci retracements and MACD (looking for higher timeframe divergence). I don't tend to use many indicators.

Basic Approach:
I start out by looking at higher timeframes (weekly, monthly) to get an idea of where price is going and to determine the major horizontal support and resistance zones. I then look at the daily and 1 hour charts to get ideas for entry points. Once I'm in a trade, I typically use the 1 hour charts to update my stops and decide when to get out of the trade.

Risk:
I typically trade a maximum of 5% of my account on a given trade (I have a fairly small account). That said, once a trade is going in my direction, I look to move in my stop as soon as possible to decrease the risk.

My posts in this thread will be mostly for myself, but I'm more than happy to discuss how I trade with others that might be interested. I'll often post images and sometimes likely video as well. I find this helps me keep focus and prevents me from trading without going through the motions (patience is a virtue, and not one of my greatest skills...).

AUDCAD UPDATE


Weekly:

The monthly chart shows a long term bullish trend. I have two major bullish trendlines on this chart - one of which was originally drawn on the monthly chart. I've identified 4 major horizontal support/resistance zones using the weekly chart. This is what I'll use to make my trades in the lower timeframes (along with trendlines). Look at how price is right near a major bullish trendline and a horizontal support zone. This has me looking for a long trade. However, I need to be careful; the MACD divergence being shown suggests that the long term bullish move might be loosing steam.


Daily:

The daily chart shows how price has come down into a zone of support starting at 1.0240. You can see a market buy order I placed the other day. I would have ideally liked to have placed it a little earlier below 1.0240, but I missed it by a small amount. I'm looking for price to make its way up to the next closest major resistance zone around 1.0437.


Hourly:

The hourly chart shows a few shorter term trendlines. These are what I use to move up my stop. Currently, my stop is set at break even, which is also basically below two separate short term trendlines.


Currently, this trade is at +1.1% of my account, with my stop at break even (free trade!).

GBPUSD UPDATE


Weekly:

This chart has me looking long in the higher timeframes. However, we're currently still in a bit of a messy ranging area between two major support/resistance zones. Looking at the short term is definitely necessary.


Daily:

The daily chart shows a bullish trend so far this calendar year. However, as you can see, I'm in a market sell trade from last night. Although it was a risky trade, I was looking for a bounce down from the resistance zone starting at 1.5882. In cases like this, I always look to move up my stop very quickly.


Hourly:

The daily shows a bit better why I took the market sell trade; I was looking for a short bounce down from the resistance zone highlighted in green. My original stop was at the top of this resistance zone (all the way up around 1.6000). My target was the support zone near 1.5810. Unfortunately, I forgot to place my profit target and missed getting out of the trade earlier today. Oh well, mistakes will be made... Regardless, my stop loss is now at break even and I'm looking to see if price can make its way back down to the lower support zone. On my daily chart, I also have a the 38.2%, 50%, and 61.8% Fibonacci retracement levels showing from the most recent bearish price swing. At this point in time, it looks like price is being held around the 50% retracement. Hopefully it will bounce back down.


Currently, this trade is at +2.5% of my account, with my stop at break even.

Congratulations for your Free Trade!

How many Pips is reasonable to set a breakeven ?

Sometime i use 5 Pips but i think is too small and use 10 pips, how you manage Breakevens ?

Best way to trade keeping it simple. I find trendline, support & resistance very fulfilling myself. Keep it on

I don't personally use a set number of pips profit as my deciding factor when moving a stop to break even or close to break even. If the trade moves in my direction I look for new minor areas or support or resistance made by retracements in my hourly chart. If I see one, I will most often move my stop near it (slightly on the opposite side to current price).

In some cases, however, I might move it up before one of these minor support/resistance levels have occurred; typically this would be if I can (no set number of pips) and I'm no longer feeling confident in the trade. This could be the result of new news, fib analysis, price action looking like it's having trouble going my way). Also, I'm quicker to move up my stop in general if I'm trading counter to the higher timeframe trend.

In short, I take into account many factors when moving my stop. It's a good thing I did this with my GBPUSD trade yesterday since that fib resistance I showed on my hourly chart didn't hold. I would have made some good money on the trade had I remembered to set my profit target, but at least I didn't lose anything.

I closed out my long trade on the AUDCAD earlier this evening and have now gone short on AUDUSD.

On the AUDUSD daily chart, price has pushed up into a resistance zone and is also approaching a longer term (weekly) bearish trendline.

More details are in the following video:

Well... looks like the Aussie didn't react like I thought it would; my trade was stopped out.

I'll take another look tonight - EURUSD might be setting up for a short trade soon (maybe today, maybe tomorrow).

Recap of the last few days - missed a trade:

Unfortunately I missed a good short on EURUSD (even though I was waiting for it in my last post). I was waiting for price to make its way up a bit further when it bit short early on my. Oh well... can't get them all.




Going long on GBPUSD:

Anyway, I've placed a market buy on cable tonight. I'm looking for a bounce off a long term bullish trendline just above a long term horizontal support/resistance zone. Here's a video that explains more as to why I'm in the trade.

Hey people I am new to this forum and wish to expand my knowledge in trading I have come tho this thread because you are using zones instead of lines can you please help me identify these zones I have been struggling to get it right my email is [email protected]. Thankyou for any help given

mike, looks like your gu long worked out well.

i enjoyed your videos.. please keep them going.

great stuff.

Thanks Tyoon,

I've still been trading with this method successfully over the past few weeks but had not had time to add new videos to this thread.

I still plan to get back to doing it as a way to keep myself on track. Hopefully I'll have a new trade up for this week or early next week.

Cheers.