Hi, I am still using a demo account and I’m practicing a lot. I tend to use the 10/20 SMA crossover strategy and it seems to be pretty reliable even tho it’s slow to detect trends.
However, I don’t seem to have success with S/R but supposedly it’s one of the safest indicators. I think my confusion is when the S/R seems to be non-horizontal.
Like in the picture I linked, the S/R seems to exist but it has an angle. So in this case, is the S/R as much reliable? Do I have to use it the same way but with channels like I drew?
I read pretty much all the Babypips school but I don’t remember reading about that.
The issue with non-horizontal s/r is that you draw it across these points at this angle but other people either don’t draw sloping s/r at all or they might use different criteria for their points. If price is 1.1234 at 2035GMT, then that is the same for everyone in the world. Obviously different people will attach different significance to that price, but nobody will be able to argue with the price.
Whereas some slope drawn for unknown reasons between unknown points is just a little random. The real issue with that is partly that you will be making assumptions very few others in trading will be making, but even worse, will you be able to draw the same s/r on a similar chart in a year’s time? Because unless you know what you are doing, you won’t be able to gauge its value and you won’t be able to do it again consistently.
I use both S/R levels as well as chart patterns. I personally find chart patterns a pretty reliable path towards the main S/R levels. You’ve drawn an ascending channel.
Here’s my daily chart that includes both:
Don’t forget that the market is never perfect as you use to see in tutorials and text books. S/R are zones and not just a line on the chart, so use zones that will be much better, which also mean wider SL placement and more winners. Sometime using a line on the chart make you think the market will reverse at that line at the exact pip, it does not work that way. The below is still a good and valid support area.
