Technical Analysis - Support and Resistance

I would like to emphasize the basics and importance of support and resistance.  The following are the key levels I look out for

• Weekly high and lows
• Monthly high and lows
• Obvious levels tested more than twice
• Necklines on my road map
  

Support and resistances are regions and not exact values, thus in Forex, if you try to trade on breakouts alone, it is going to be a daunting task. (notice that spikes are common in Forex)

When choosing points, I usually do two things.  I would choose the extreme high or low as the level and I would also identify the common high and low (region).

I would usually trade on breakouts when it is a confirmation of my trigger.  e.g. a TLB (after an early trigger), breakout from flags signifying continuation of trend.

For trend reversals, I play it a bit differently. (to be discussed in future posts)