What would you do in this situation

HI,
Imagine there is a support level that has been tested two or three time and every time the price has been reversed .Now there is another attempt to break that level .Is it make difference if the price comes down and touch that level and then reverse or there is some pips to touch that level ?
Is it important to touch that level or it’s better to touch?

If you see a reversal pattern like hammer would you buy ?

Thanks

The more times a level is touched or approached and still held then the stronger it is. You can look for a buy signal confirmation when it reaches the level and go long.

Or if you think it will be breached - or it is breached wait for price to break the level, come back and retest it then look for a signal to go short when it’s confirmed that support is now resistance and price is now in the next pivot zone.

What pair/timeframe etc - got any charts?

I attached a chart.

So ,do you think it’s important the price to closed near or at that area or it’s not important ?
it’s aud/chf one hour chart.
thanks


An approach of a level is as good as a touch (according to Martin Pring). If you look back the level that it stopped has had a few bounces recently as well, more than where you have drawn your line.

I don’t really trade 1H so it’s less significant a support level, either way looks like a bounce to me.

It looks to me like a good shorting opportunity. In that graph, notice it was extremely bearish, then some consolidation and then recently it is making lower highs. I would short that **** with stop at recent high (around your middle red line) and t/p at 1:1. Note: I haven’t looked at results.

To me, that consolidation has no bias. The upside strength is being eaten up just as much as the downside. Since it appears to be forming a pennant, your best bet is to delay any decision until price breaks one of the boundaries of the pennant, retraces back to the boundary, and then moves again in the direction of the break.

Something like this: