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Thread: Resistance turned new support and support turned new resistance system

  1. #1
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    Resistance turned new support and support turned new resistance system

    There are times when price would break a support level to move down and later the price could move up again to that support only to see price push back once it reaches that level. When this happens, we would say that the old support is now acting as a resistance.

    Alternatively there are times price would break a resistance level to go up but afterwards the price would start falling and when it reaches that resistance level, it pushes the price back upward. In this case we would say that the old resistance is now the new support.

    Currency to be traded : Any
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    Entry buy rules : if resistance is broken, wait for a fall in price back to that level and then if it pushes it back and do not break, enter a buy trade
    Stop loss would be 10-20 pips below the old resistance now turned support. Take profit should be previous swing high

    For sell entry : if support is broken, wait for a rise in price to reach back that support level and then if prices pushes and closed back, enter a sell trade.
    Stop loss would be 10 -20 pips above that support now turned to new resistance.. Take profit should be previous swing lows

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  2. #91
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    When a certain resistance is well broken then it will turn a support and when a support is well broken then it will automatic turn a resistance later .Before we can understand this principle very well, we must be able to understand what resistance and support are and what importance they play in the market, they are points and positions in the market where there are some contention as per whether the prevailing dominion will continue or not.Rejection or breaking of such positions is what determine if it is going to hold or not.

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  3. #92
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    Quote Originally Posted by glory3 View Post
    When a certain resistance is well broken then it will turn a support and when a support is well broken then it will automatic turn a resistance later .Before we can understand this principle very well, we must be able to understand what resistance and support are and what importance they play in the market, they are points and positions in the market where there are some contention as per whether the prevailing dominion will continue or not.Rejection or breaking of such positions is what determine if it is going to hold or not.
    if resistance is broken wait for a fall in price back to that level and then it will come back and do no break so try to make it entry point with buy trade, if support is broken wait for the rise in price to come back that support level and then it comes back market entry point with sell trade. stop loss is very necessary tool to be placed wile you can select such strategy to take profit with new support and resistance points.

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  4. #93
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    Quote Originally Posted by glory3 View Post
    When a certain resistance is well broken then it will turn a support and when a support is well broken then it will automatic turn a resistance later .Before we can understand this principle very well, we must be able to understand what resistance and support are and what importance they play in the market, they are points and positions in the market where there are some contention as per whether the prevailing dominion will continue or not.Rejection or breaking of such positions is what determine if it is going to hold or not.
    A perfect understanding about the resistance and support level will indeed go a very long way for us in this market. We should have a plan to manage our trade and realize that its only when we can build up a profitable trade that we can have what it takes to earn from the market. The very right support and resistance level must be understood so that we can always learn to open the right trade and know how to as well protect our capital. New support and new resistance will come along hence there is prior breakout of the past support and resistance price.

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  5. #94
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    One of the permanent eventuality of the forex market which can never be changed by any trader or any law is that a resistance will eventually become a support and a support level will at a time become a resistance levels. Sometimes we get caught up in the trick of the forex market when a trend is very strong and from the look of things it will appear like it will never take a u-turn, this to me is the deceit of the market to make us lose money and very unfortunately we fall for this many times.

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  6. #95
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    This is a common scenario that will always happen in the Forex market, support always has a way that it becomes resistance based on the volatility and market conditions, sometimes we need we trade a support and we understand that it has been broken, we should immediately think about how to see it as a resistance subsequently.

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  7. #96
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    Quote Originally Posted by Leonvic View Post
    This is a common scenario that will always happen in the Forex market, support always has a way that it becomes resistance based on the volatility and market conditions, sometimes we need we trade a support and we understand that it has been broken, we should immediately think about how to see it as a resistance subsequently.
    confirmations are necessary to make sure we are following the correct indication from market support and resistance area. we can not completely depend on the levels alone without using different strategies to help us get better accuracy because market can give wrong signals sometimes. that is actually how market is creating its movement by breaking new levels and turn previous resistance in market to become next support area.

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  8. #97
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    The use of support and resistance is a very important and a added advantage in trading.identifying support helps alot in taking and staying in a trade and resistance keeps the trader from entry trade and exit from trade to prevent lose.sometimes both can be interchange in their function this only happens when there is a change in trend and when price finally break through a resistance and the resistance will now be acting as a support.

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  9. #98
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    We have to learn on how these support and resistance levels work and build our experience in the market. It is true that a strong support when breached can become a resistance and the same with resistance levels. If we look at history we find that experience is must to be a successful trader, but it should be noted that all experienced traders are not successful.

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  10. #99
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    In good trends support and resistance are touched from a bit further. That is tops against bottoms on one zone should not meet each other's values. In wave analysis there is a particular rule for it, in other theories it's also mentioned. The most important consequence of this is when trend is about to end tops and bottoms start repeating values in a single zone. It's an early sign that can help us exit on time with largest profits.

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    Wow. Much Forex. So Monies. Very Opportunity.Many Trade. So Amazed. Wow.

  11. #100
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    Forex is a tough business and using support and resistance level trading strategy is best choice of traders and when they are use this trading strategy with patience and proper planning then their earning is become really easy for them. This is one of the basics every trader must understand and work on the best way to make their trading as long as they want to succeed.

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