AU H1
The top most dotted red line and the bottom dotted yellow lines are S&R areas picked from D TF.
The middle red line is a best fit level on H4, which did not show on D TF.
We drop it down to H1 and the lines fit perfectly. Now the price has hit the middle line and is touching that line. We should always try avoiding a sell on this scenario. We are effectively selling at the bottom for all intents and purposes. It could just break through the support and keep falling. But most often than not, it will bounce back off and pull some horrid stunts before falling back. Or in many cases, it might decide to fly back up.
This is why many do not make it in trading. By the time our brain accepts that prices are falling, prices often are done falling. We have to be able to see whats going to happen with the charts. That, my friend is the toughest part of trading.
Now look at the Yellow arrow on our extreme right. That is where I caught my AU trade for 40 pips. Prices fell, through the D TF support/ resistance area from above, then it did a pull back exactly for an hour and the following hour gave us a beautiful entry with so little as SL. 40 pips is enough since I was already holding a good one on EU.
How do I know the S/R line is still valid? Look at how the previous H1 candles behaved on that line when prices were above it? Prices pulled back each time it was touched. Right on that line. So when there is a pull back and a new candle starts with a small wick at the top and starting to form a bear candle, we can say with confidence that its going to go down.
Now if I have to sell AU again what would I do?
I will wait for AU to go back up a little and maybe bounce off 1.0239 or 1.0271 if its very undecided.
Or I would wait for price to break the current middle line at 1.0226, do a pullback and see if a bearish candle forms.
We always wait for prices to pull back and test the area for an entry, which is what selling high or buying low means.
We dont enter now just because previous candle was a strong bear. Then we see it gives us 10 pips before turning back and shooting all the way up because we sold late! We sold at support. We buy at support, we sell at resistance.
So this is what I mean by patience. Wait for the candles to tell you something or for prices to retrace back to support and resistance areas.
That is the essence of support broken, becomes resistance, resistance broken, becomes support, buy low and sell high.
I am working on translating these to even higher TFs so I can finally swing trade. ( mind you I still dont really know what it means, except for the fact that we enter on D TF and hold for a few days ).
So hope that helps