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Chapter 8, Part I. Support and Resistance Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 15, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Commander in Pips: For this conversation, we will build around chart #3, but previously you should remember, what we’ve talked about stop-loss orders (if you’ve forgotten it – refresh your memory with the corresponding chapter).

    Pipruit: Ok, I remember that – stop loss orders are usually used for limiting of potential losses if the market starts to move in direction against your position.​

    Commander in Pips: That’s right. Now, what we’ve talked about support area, just in the beginning of current chapter?

    Pipruit: Well, support area holds market from further move down, at least temporally.​

    Commander in Pips: Excellent. Let’s suppose that you intend to enter Long (buy EUR/USD), and you have two possible areas where you can do that – from some support area or just in market’s free flow move, so where will you act?

    Pipruit: Obviously from support – it’s safer because, as we’ve clarified already, the support area holds the market up, “supporting” it from a further move down, so the probability is much higher that the market will starts to move in my favor from support, than just from “nowhere”.​

    Commander in Pips: You’re absolutely right, so as other many-many traders. And, say, if you see support and open Long position – where do you place your stop order and why?

    Pipruit: Below the support level because it hardly will be triggered – market will have to struggle below the support area to reach it, and why are you asking about obvious things?​

    Commander in Pips: Yes, so are other many-many traders… and now listen carefully:
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