Trading with horizontal lines and patterns of price

What is support?
Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. The logic dictates that as the price declines towards support and gets cheaper, buyers become more inclined to buy and sellers become less inclined to sell. By the time the price reaches the support level, it is believed that demand will overcome supply and prevent the price from falling below support
What is resistance?
Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The logic dictates that as the price advances towards resistance, sellers become more inclined to sell and buyers become less inclined to buy. By the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising
above resistance. Putting the two together from a tradable perspective, we can now say that horizontal support and resistance levels are price levels that show the logical points atwhich the market established common open, close, high and low for months, weeks and days. We’ll be using these points more than the support/resistance trend lines because of its strength.
We will first draw it on daily chart then we’ll switch to 4hourly chart to fine-tune and draw more.
See example below.
Trading with horizontal lines and patterns of price
If you find it difficult to spot out, you could use Fibonacci drawing tool to track out these levels. You can do this by clicking on it on your brokers platform and holding the high of the highest candle and dragging it down to the low of the lowest candle on 4 hourly or daily chart. In the example below I used daily chart in order to cover at least 2 to 3 months worth of data then I take it down to 4 hourly to fine-tune the drawing by spotting out more resistance and support levels using horizontal drawing tool.
Trading with horizontal lines and patterns of price
Tips for accurate & Strong Entry points
Trading with horizontal lines and patterns of price. Hammer pattern
Bullish Hammer - If or trend line support and closes above the logical goint, you can trade such setup with absolute confidence. I regard to such as Sure Trade. From research, 90% of such setup does not retrace before taking off. So I recommend market order or instant execution order for a long position whenever such opportunity triggers.
In the chart below, a bullish hammer having a small shadow at the top with T&C appeared at a horizontal support. To locate our entry point at the 50% Fibonacci retracement level what I do is use the Fib tool and drag it over the whole body of the bullish hammer from high to low, the 50% fib level will be our entry point for the buy trade located on the chart. The next candle retraced to 50% Fibonacci retracement before going up.
Trading with horizontal lines and patterns of price. Hammer pattern

Bearish Hammer - If a bearish hammer with T&C appears at a horizontal support or trend line support and closes above or below the logical point, I recommend trading such setup using 50% Fibonacci retracement. From research, 90% of such will retrace to 50% Fibonacci and even sometimes as low as 32.8% retracement before taking off. For a setup like this I recommend trading it with a buy limit pending order at 50% Fibonacci retracement on 4 hourly chart.
Inverted Hammer
Trading with horizontal lines and patterns of price:Inverted hammer

Inverted hammer
Bearish Inverted Hammer - If a bearish hammer with T&C appears at a horizontal resistance or trend line resistance and closes below the logical point, you can trade such setup with absolute confidence. I regard to such as Sure Trade. From research, 90% of such setup does not retrace before falling like a pack of card. So I recommend market order or instant execution order for a short position whenever such opportunity triggers.
Bullish Inverted Hammer - If or trend line resistance and closes above or below the logical point, I recommend trading such setup using 50% Fibonacci retracement. From research, 90% of such will retrace to 50% Fibonacci and even sometimes as high as 61.8% retracement before waving down. For a setup like this I recommend trading it with a sell limit pending order at 50% Fibonacci retracement. In the above chart, a bullish inverted hammer with T&C appears at a horizontal resistance. Even though it closed below the logical point yet the next candle rallied above 61.8 Fibonacci retracement which was just about 10 pips above 50% Fibonacci retracement.
Trading with horizontal lines and patterns of price

Other types of reversals could as well be monitored to close above or below the logical points as the case may apply. This will give us a clue for accurate entry as we decide whether to use pending order or to execute instant order. For other types of reversals at logical points, I recommend trading it with 50% Fibonacci retracement.
Currency pairs:
Any currency pair that has a good trending behavior is recommended. But I use it
mostly on these pairs.
GBP/USD
GBP/JPY
EUR/JPY
AUD/JPY
You’re free to back-test it on any currency pairs to see how it obeys our setup in the past, this will help you to make good judgment whether it can be traded in addition to the above pairs.
Take Profit:
Your take profit should not be determined by your principled numbers of pips per day but much more by the next nearest logical point of retracement. Whenever you take a long trade position from a horizontal support, your take profit level should be the next horizontal resistance line or the next resistance trend line as channeled out on your chart. Whenever you take a short trade position from a horizontal resistance, your take profit level should be the next horizontal support line or the next support trend line as channeled out on your chart.
Stop Loss:
Your stop loss level should be below/above your reversal candle. You can make it 5 to 10 pips below the low of your reversal candle in a long position and 5 to 10 pips above the high of your reversal candle in a short position.
Trade Management:
This is so much important if we must succeed in our trading career. A winning trade can turn to be a losing one if you do not know how to manage your trade. The moment your order is triggers, trail-stop to break even at the close of your current candle. This would serve as a security to your trade. You may also decide to incrementally lock in your profits as one candle closes after another. In doing this, be sure you’re not too close to the current market price as the market may stop you out
prematurely though at a profit. You can now sit back and watch your profits run for days until it hit your take profit at the next logical point. I believe if you’re patient enough to allow these opportunities to present itself based on our entry rules,will transform and sharpen your trading acumen with winning trades no matter the moves in the market.

Here are MQL4 indicators shared to accomplish this strategy. But we need to learn how to draw horizontal lines (pivot levels, Fibonacci retracement, support and resistance lines and recognize patterns of price without MQL4 indicators).
Indicators that are in the folder for download are:
Candlestick CPI
Hammer Feast
Pattern Recognition
Pivots levels
Enter link in the url and download.
https://drive.google.com/drive/folders/0Bwjv2Pbf48itc3FJUmdSSjRGN3M?usp=sharing

In the picture below MQL4 Template
Trading with horizontal lines and patterns of price

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