This is my first post on any trading forum. I am trying to get more comfortable with basic price action concepts that I can use for trading currencies that are in trend.
Please forgive me if this question has been discussed before (I am sure it has been in one form or another) but if the price has managed to break a S/R zone (for now lets not discuss what if it is a false break etc just to keep it simple) can the trader expect that the next S/R level that doesn’t look as strong as the broken one will also break?
To be more specific, for example I am trading a three time frame simple trend following system of my own and I usually use the smallest of these timeframes (5 min) for entries. My entry will be on a break of a certain S/R level on the smallest timeframe I use, my SL will be the next S/R above/below the entry level (where my trading idea is invalidated, at least on the same TF I use for entries). Now I need to know where to take profit. If the next couple of R/S levels on the 5 min chart look not as strong as the one I used for entry (i.e. the level has been tested less times) would it be logical to take profit (or at least close more than half of my position) at the first stronger S/R level? Usually this stronger R/S level would also appear on a higher TF chart (1 hr). Am I at least on the right course?
And finally another shorter question - is a swing high/low considered to be a stronger S/R level than a S/R level that is NOT a swing high/low (i.e. it appears only as an horizontal area repeatedly tested by price)?
I understand that on a smaller TF the swing high/low would also appear as a level that has been tested multiple times by price. But lets go back to the higher TF (5 min) where I make my entries). Does the fact that price has been rejected in a more aggressive manner (i.e. bounces off and quickly goes back up/down) make this level stronger than the other S/R levels.
Thanks in advance for your answers.