Forex Trading For Beginners: the BEST Support and Resistance Levels

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Forex trading for beginners
Forex trading for beginners

Forex trading for beginners provides a steep learning curve. This video on the best support and resistance levels will help speed up your Forex education to get you on the road to profits faster.

Support/Resistance zones are price levels that can cause the market to stop going up or down. Therefore they’re key areas for you as a trader to be aware of because they provide potential entry, exit and profit-taking levels.

What are YOUR best support and resistance levels? Enter your answer in the COMMENTS section at the bottom of this page. 

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VIDEO TRANSCRIPT:

Welcome to the video on forex trading for beginners and this is Barry Burns with Top Dog Trading. Today we’re going to tackle a topic that is one of the first things I ever learned when I took a formal class in technical analysis. But I still rely on it heavily to this day, 49 years later.

Well actually my dad started teaching me and I was eight years old so I think I took that class like 20 years later but still a long time ago, long long time ago. And this is very basic stuff but as is true with many things, whether it’s sports or academics, or just life in general, the basic things are often the best. And so this is good, whether you’re a beginner, intermediate or advanced Forex trader.

BTW, this works equally well for trading stocks and futures!

THE BEST SUPPORT AND RESISTANCE LEVELS FOR FOREX, STOCKS AND FUTURES

We’re going to looking for support and resistance, and major highs and lows in the market that just stand out to the naked eye.

Markets are essentially a big huge international auction place and the more people that see a support/resistance level, the more participants are likely to respond to that support and resistance level. To buy off of it, to sell off of it, take profits into it, etc.. And so has a self-fulfilling prophecy.

It’s kind of funny, some people say, well that’s just a self-fulfilling prophecy, and my point is well but that’s exactly why it works. So why would you diminish that it’s just a self-fulfilling prophecy. In the markets, in the auction place, yeah people get excited about something or they are not interested, and that effects the price. Whether it’s driven up or whether it’s become stagnant. Has to lower. That’s exactly how markets work.

THE TOP DOG TRADING PRINCIPLE OF 3

We’ve got a high here. Market comes down, retest that once. Comes back, retest twice. Comes back, retest for the 3rd time. If the market does not go above that level after 3 retests, it’s likely not going to go, and again it’s just the psychology, the mass psychology.

I should say of the market where people are saying, you know the market has retested this price level now 3 times, and it hasn’t broken above it, it’s probably not going to. Why? Because people aren’t willing to pay more than that. They don’t see more value than that price level for, in this case the dollar yen. And so we’ve tried it 3 times, or we’ve retried it 3 times. Not going, so probably not going to go and so it goes down.

Now where does it go? It goes to the very next support level as defined by a major low. So let’s go back and see where that came from. It came from there but actually goes back before that. It actually goes all the way back to here and to here.

Again you see 1, 2, you can see these levels. The market came back to it again. 3, 4, comes off of it. Now this is what will often happen. So the market now, the other point of the Top Dog principle of 3 is that it works best when they are close together. Why, because that stays in the memory of traders.

So that’s pretty much the point. People are looking at it and saying, within a short period of time, relatively short period of time, where you can see it on the charts. These are some of the best support and resistance levels.

FOREX TRADING FOR BEGINNERS: THE CHART TELLS THE TALE

It’s all right there in the chart. And you see it. You don’t have to scroll back and look back a year or two. Then it’s right in people’s awareness and that’s the way it works. The principle of 3 does not work as well if it’s over a long period of time length. This is 2016 and we have to go all the way back here to, well going back over a year. So we are going back about a year. So therefore it’s not as readily available.

Will some people see it? Absolutely they will, and for that reason people did respond to it. So the market came down, 1, 2, 3. Tried it three times and then made a big move up. Because people gave up on shorting the market here. They thought okay well the market thinks its worth more than that. Market, meaning the market participants globally. This is one of the key principles for Forex trading for beginners to understand.

So yeah, it went up quite a bit, but then, boom. And this time it just slid right through. Now there’s one little bar there that shows that the market did acknowledge that support level and that is this one right here. It’s a very neutral bar. I just call that a bar of hesitation. So it didn’t bounce up of the level. It’s not a bullish bar, it’s not a bearish bar, it’s just that the market participants are again are like, ‘oh we know we are into this well-known support level’ and so for one day, the market hesitates.

EVEN THE BEST SUPPORT AND RESISTANCE LEVELS DON’T ALWAYS HOLD THE MARKET

Remember, even the best support and resistance levels are broken all the time. They don’t hold every single time. If they did, well the market would never be able to go anywhere right. So of course, support resistance is broken. But this, these are areas where we look to potentially buy, potentially sell, potentially take profits into. And you need to obviously use other things along with support resistance. You can’t use just support resistance alone. It’s one of the the four energies of my five energy methodology. It’s actually step 4 of 5 that we look at in my very rule based objective trading methodology.

By the way people often ask, ‘Well how do I know if the market’s going to hold support here, or break through it? great question. Very important question. Here’s the answer:

  1. Is it time for the market to put in a cycle low?
  2. Is this market moving down with tremendous strength or momentum?

And so if you are interested in my cycle indicator (which will help you know if it’s TIME for the market to put in a cycle low), I’ll be happy to share that with you. Just send me an email at Barry@TopDogTrading.com and I’ll be happy to share that with you absolutely free.

What are YOUR best support and resistance levels? Enter your answer in the COMMENTS section at the bottom of this page. 

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Also I am giving away one of my best Forex trading for beginners strategies that works today. Just fill out the yellow form at the top of the sidebar on the right. Once you do that, I’ll personally send you an email with first video.

Those interested in stock Forex trading for beginners and the best support and resistance levels also showed in interest in this video:
http://www.topdogtrading.com/stock-market-trading-when-to-exit-a-trade/

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