I agree with the other two guys, NickB’s method is they way to start S+R trading. There are other more advanced ways to trade S+R you can get into later, but I’d definitely start with the NickB method.
As for lot sizes, I suggest you risk a set percentage of your account balance per trade. I use 2%, so if I had a $1000 balance and I was about to enter a trade with a stoploss of 50 I would divide my risked amount by the stoploss ($20/50) and get 0.4. So I know I should trade $0.40 per pip, which equals 4 micro lots.
I’ve been doing a bit of playing. Now I don’t normally trade D1, but thought it may be worth a go, from what I found it’s one of the most popular timeframes. With stronger S&R levels and less noise etc.
Ok so I thought I would draw some S&Rs. Please check them (attached), have I done them in the right place, is this where you would have drawn them? If not, how come?
Ok, so now I’m looking for either a reversal or breakout, right? When I spot one, I would then open a trade with lets say a 50 TP and 50 SL for example? Or with it being daily TF, I could maybe go for 100+ pips?
I think the answers were below. Go to Nicks method and learn that. It will give you a simple stress free system on sup/res. Then once you believe you understand things i guess you could visit nobrainertrades.com for a more advenced method of trading sup/res.
I don’t mean to sound rude, but asking the questions you are, you really need to learn only Nick’s first until you are profitable. Don’t make things harder on yourself than you need to.
It sounds like you are basing your 50 pip loss based on NickB’s method, but you need to keep in mind the 50 pips are based on both the GJ and the time frame. For the daily, i am not of the opinion that a static tp and sl pip count is in line.
I do not have a problem with your lines, just make sure you start with the weekly or even the monthly and start drawing your lines. I think you should be able to get most of your common “reaction zones” from the weekly and then firm them up on the daily .
If you believe your lines are correct, after looking from the weekly down, then I would suggest seeing how price reacts around the zones. If price bounces off your lower zone, and you see are reversal pattern, then I think placing the trade with a T/P below the resistance (the upper line), and and a stop just below the support (lower line) is probably a safe bet. Of course, you want to make sure your risk reward ratio’s are in line.
If price continues past, closes lower and price action is still bearish past your support, your T/P would be just above your next support level and a S/L just above the line that was broken.
Keep in mind that when trading the daily, your trade will normally be open for a day to a week or more, and you should manage your trade along the way. I have a personal preference to not use market orders, I would rather forgo a couple of pips to ensure that I have momentum on my side when my trade is finally activated. I will usually place this in a logical place just above the latest high (For longs), or below the latest low (for shorts). Finally, I do not play those lines as exact. I have read, and believe, that those are areas and should be used as guidance and not a firm, 100%, accurate place to align your trades.