Thu. Jul 7th, 2022

Fxtriangle | Market analysis | Managed trading

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How to set a Stop Loss based on Support And Resistance from charts?

1 min read

The basic trading method for using support and resistance is to shop for near support in uptrends or the parts of ranges or chart patterns where prices are moving up and to sell/sell short near resistance in downtrends or the parts of ranges and chart patterns where prices are moving down.

A more sensible as the determine stops would be to base it on what the charts are saying. One of the items that we will observe in price action is that there are times when prices can’t seem to push or break beyond certain levels.

Often times, when these areas of support or resistance are retested, they might potentially hold the market from pushing through once more.

Setting stops beyond these levels of support and resistance is wise, because if the market does trade beyond these areas, then it’s reasonable to think that a chance of that area will usher in more traders to play the break and further push your position against you.

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