The Authority’ on Live forex charts with support and resistance mt4 Action Trading. In 2016, Nial won the Million Dollar Trader Competition.
Many traders make the process of drawing support and resistance levels a lot more difficult than it needs to be. After you have a general idea of how I draw my support and resistance levels, you should have no problem using that knowledge as a guideline to draw the levels yourself. We get tons of emails each week from traders asking how to properly draw support and resistance levels on their charts. Today’s lesson is going to be a tutorial of how I draw my levels in the market. I decide where to draw support and resistance levels on some real-time daily charts. You can use this lesson as a reference until you feel comfortable enough drawing the levels on your own.
Many traders fall into this trap, they end up taking an hour to draw on every little level they can find. What they end up with is a really messy chart that basically does more harm than good. You need to learn to draw only the significant levels on your charts, then you’ll have a useful framework to work from. This is perhaps the biggest myth that traders have about drawing levels on their charts.
Unless you are a long-term buy-and-hold investor right now, you don’t need to go back more than about 8 months when drawing your levels. Below are examples of how I would draw the relevant support and resistance levels on some of the major Forex pairs, Gold, Crude Oil and Dow Futures as they stand at the time of this writing. Above each chart is a brief explanation of why I drew the levels where I did. In this example, you can see this market is clearly in a trading range right now between about 1. Within the range, we have some shorter-term levels that are still significant albeit less so than the key levels just discussed. Of special note are the two shorter-term resistance levels marked on the chart below.
You will see that the one near 1. Also of note, there was an inside bar on October 18th, and after the market broke down from that inside bar it tried to rotate back up to about where it broke down at, and this breakdown level acted as resistance and held the market off from advancing further, and then as we can see the market has since fallen away from that level. This will work to give you a framework for the current market conditions and gives your analysis some routine as well. In the example below, we can see a very good example of a resistance zone that occurs between about 1. Whereas, shorter-term levels give rise to smaller movements and tend to break easier.