Support & Resistance
Powerful Strategy Accuracy 76-85%
“Support and resistance levels are key areas where the price action of an asset can experience a stall in a downtrend and uptrend respectively.”
When trading binary options, it can be significant advantage to know what the support and resistance levels are on the chart. In fact, by only knowing SUPPORT & RESISTANCE points can guarantee you success in binary options trading. Support and resistance levels show the minimum and maximum price level that an asset is suppose to reach respectively. In other words, it is likely that in a downtrend, sellers of an asset are more likely to exit their positions at a support level. This causes prices to stall and reverse at those areas. On the other hand in an uptrend, it is likely that the price action which is being driven by buyers of an asset will stall at a resistance level because many of these buyers will exit their positions at those levels.
So, what all of this means? In simple words what I mean is that Support & Resistance levels are like a Floor and Ceiling of the house or room. Support is the Floor; and Resistance is the Ceiling.
For binary options traders, it’s extremely important to identify these Support and Resistance levels. WHY? Because prices ALLWAYS are contained within the Support & Resistance range. If you can identify that price is touching Support, then you can assume that the price will jump back up so go ahead and enter a CALL Trade. Or if you are noticing that price is touching Resistance level, then you know that price will most likely jump back down, so go ahead and enter a PUT trade. Look at the image below to get the full idea behind this strategy.
Our Advice when using this strategy!
1. This strategy works on most time frames from 5 minute to Daily charts. Avoid 60 second trades!
2. Works on both RANGING and TRENDING market conditions, bit its best on RANGING market. (Please look at image of ranging & trending markets below).
3. This works great on all trading sessions, but we would recommend to trade this strategy between 6GMT and 12GMT. Also avoid trading 30 min before and after important news.
4. This works on all assets, but works best with : EUR/USD; USD/JPY; GBP/USD; USD/CHF; AUD/USD; NZD/USD; EUR/JPY.
5. Price has to touch at least 2 or 3 times the same price point. That’s the indication that the price is either at Support or Resistance.
Support & Resistance BREAK OUT
Let’s move on. So SUPPORT & RESISTANCE lines create this range in which the prices jums up or down. But sooner or later price will break either Support or Resistance points. (lok at the picture below).
When price break the support or resistance point that’s what we call break out. Then there is another rule! When price break its RESISTANCE point, it automatically becomes a SUPPORT point, as you can see in the image above. You can clearly see that the Pull Back point has become a RESISTANCE.
When trading binary options you can benefit from these SUPPORT & RESISTANCE points over and over again. Why? Because this is the way market prices act again and again repetitively. Just forget about all of the indicators for a second! If you can master to identify SUPPORT & RESISTANCE levels in Binary options trading or Forex trading, then we are sure that you will be able to get over 85% in the money success rate.