I assume this is the best place to ask this question, seeing that I am a newbie
I’m trying to learn and understand Price Action which from my understanding involves (but not limited to) trends as well as looking for support and resistance.
Below (if I have attached the file correctly) is a GBP/USD daily chart I am looking at. I have marked out the trend and also some support and resistance lines (again I am new to this so I hope these have been set up and marked correctly.) My question I have is if the trend is going UP, as appears to be the case here, and there is also a resistance line as well, is it best to follow the trend going Long within the channel or is it best to look to go SHORT at the resistance price?
As a newbie I see this and at first I say…“Follow the trend” but then I think…“Hmm…theres a resistance point there so it could bounce off once again and come back down.”
I hope this explains where I am coming from and again would appreciate any advise.
There are 2 lines of thought (actually there are a myriad however)
(a) follow the trend in which case you need price to break through the resistance at 1.5723 & then re-test, or
(b) let it bounce off the resistance at 1.5723 & get in on the next HL (higher low) going back up.
Another course would be wait for the bounce at 1.5723, then drill down the charts & take a short from a trigger of your choosing back down to the channel at 1.5620, 7 maybe beyond.
Also just to fan the flames a little take a look at the weekly chart.
As always in Forex there is no correct route to follow, only time will reveal it’s nasty (or nice) plan, all we can do is keep our powder dry, stop our losses short & let our winners run.
