Practical advices to trade the FOREX market

The exact drawing of trend lines, correctly determination the levels of support and resistance Strong levels is key to the success of your analysis. To correctly determine these levels and their importance to market participants, it is necessary to observe a few simple rules:

1. To draw a trend line (line of support or resistance) it needs to be drawn in at least two points - two bottoms or two peaks, respectively in two static levels of support or resistance. When the line goes through three points we say that it is confirmed.

2. The more points which the line cross through, so it is more valid, with greater impact. This is because each point (top or bottom) of the line is, figuratively speaking, a battleground between bulls and bears. Therefore, the more points (bottoms) of one example upward trend line, so there are more places where buyers are outweighed sellers. Accordingly, we must try to protract the line so that it covers as much as possible number of points. No need to protract the only absolute minimum in a bottom and must pass through the clustering of prices.

3. The longer the time a line has remained untapped, the important level of support or resistance it is.

4. Once punctured, the level of support or resistance, respectively trend line retains its importance for market transforming level of support in opposition, or vice versa.

5. Often after breaking a support or resistance for the market to adjust back to the already transformed level and from there to repel, continuing its movement in the direction of the attack.

6. The importance of a trend line, such a level of support or resistance for the market is defined by its angle. Trend line angle of 45º is the most sustainable. The more steepness in the line, so it will not be able to exert influence on the market for a long time.

7. Any return of the market to trend line will provoke interest among sellers (downtrend) or buyers (uptrend), who will try to resume their previous direction of movement of a tool.

8. Never place stop orders right levels of support or resistance. Market movements have the property of inertia, which means that reaches a certain level  could be passed through in a short time, then the market will thurst and continue in the desired direction. If the stop order was exactly level, this short passage will activate it. To avoid this, always put your stop shortly after the support level (purchase) or resistance (selling).