Learning Forex Market Movements: Basic Support and Resistance

In this quick lesson we’ll go over the basic concept of setting up your charts to trade in a support and resistance market, then make an analysis based on your chart; which leads into developing a trading plan. We’re only going to use basic tools, horizontal lines to mark the support and resistance points we find above and below price then add a few trend lines to help see the patterns unfolding. We’ll start with a Daily chart and move to the 1 hour timeframe to trade from since the 1 hour timeframe is the closest thing to a universal chart as we can get.
First the Daily chart. What we are looking for are the recent turning points in the market and we are going to mark these with a horizontal line. The lines above price (resistance) we’ll color code red since the points above price are where we look for the market to turn short from and become selling points. The lines below price we’ll color code blue since the points below price (support) are where we look to buy at. In (figure 1) I’ve marked the closest Daily chart turning points above and below price. These are the immediate support and resistance points to price, that have proven to be a support or resistance point in recent history.