World forex trading
The Authority’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader World forex trading. After you finish reading this lesson, leave a comment, like it on facebook, tweet it on twitter and share it with others.
Why are horizontal levels so important? I teach a plethora of price action trading confirmation signals in my course that I combine with levels and the trend, here’s a few examples of how I trade price action signals with obvious horizontal levels in the market. My favorite way to trade with horizontal lines is to trade them in trending markets from swing points. Thus, old resistance becomes new support in an uptrend, and in a down trend old support becomes new resistance, also known as swing points. The way that we take advantage of these horizontal level swing points, is to watch for price action strategies forming near them as the market pulls back. Another excellent way to trade horizontal lines in the market is to simply watch for price action setups forming near the boundaries of a range-bound market. Unfortunately, markets do not always trend like we want them to, instead, they often swing between support and resistance in a trading range.
Fortunately, trading with simple price action setups allows us to trade in any market condition, so we can still find high-probability trade setups even in range-bound market conditions. In the illustration below we can see an example of what a range-bound market might look like. When price is obviously bouncing back and forth between a horizontal support and resistance level, we can wait for price to hit one of the boundaries of the range and then watch for price action signals forming there. This provides us with a very high-probability entry scenario and a very simple trading strategy. It also gives us obvious levels to define our risk and reward. Event areas are horizontal lines that can be very high-probability areas to watch for price action setups forming near. In the illustration below we can see an example of the creation of an event area as well as how it could subsequently be traded.