Sunday, September 4, 2011

Free Forex Trading Systems - S and R

Free Forex Trading Systems

As an introduction to the best free forex trading systems I will go over strength and resistance.  Strength and Resistance is often the first place a new forex trader goes to get information and learn how to trade their position.  However the new forex trader will get frustrated when their levels of strength and resistance do not always work as expected.  The trader moves on to seemingly better free forex trading systems and sometimes even paid forex trading systems while neglecting S and R.  There are a few key lessons to s and r that must be known for it to become a powerful forex indicator in your toolbox and quest towards developing the best forex system.  Below I have attached a recent chart of the NZD/USD with my historical levels of S and R.  Following it will be a few rules as to how I trade S and R, use it as a forex indicator of price gravitation, and a trading mindset that should always be with you.
Forex Trading Indicators - S and R

The Best Forex System

The first is to realize that S and R as a forex trading indicator will only show the past levels that price gravitates towards.  At these levels there is often a buffer zone of 10 pips or so depending on the pair before you can determine a break or a fake out.  The second is that S and R does not tell price action.  The bars or lines on the chart will go into that.  Price action will be another tool in developing your free forex trading system, free of charge.  With the exception of the time you spend watching the charts of course.  The third and final fact being that S and R often comes different to everyone.  Do not focus on how your line is off by a couple pips when comparing it to someone elses.  Only trade what you see, not what you want to see happen.