S and R do not stand for Suckers and Ripoffs
Last week was a study in support (S) and resistance (R). Take a look at the EURUSD pair price action last week, starting Jan6. Since the previous Friday the EURUSD retraced to the 50% fibonacci, my bias for last week was for this pair to head back up and break the resistance (R) at 1.4750 and resume the up trend, toward 1.5. And, a couple times this pair did make attempts to break the R there, but it quickly would jump back below the line. It was not until Thursday, after the interest rate announcements, that price began yet another attempt up and ended the week above the resistance line. Since my trading rules only allow me to trade WITH the trend, I kept buying EU each time it began to climb toward this R line at 1.4750 and I would exit with profits once price reached this line. Now that price has broken the R line and come back down to bounce off it and remained ABOVE this line, I am expecting for further gains this week. Each and every day on my trade cheat sheet I identify where the R and S is and this helps with the day’s trade plan: buy up to the R line. If breaks, keep buying. I like to see how the R line then becomes the next support area. So my thinking for this week, watch how price uses 1.4750 for Support now. This line should be great place to buy. Of course, if price drops below here again, I make a new plan. Good trading!!�