Trading the Strong Support and Resistance Levels Breakouts
The strong support/resistance levels’ breakouts is one of the trading systems we follow at LuckScout Millionaire Club.
If you haven’t learned about this system on your website yet, you can do it now: Stochastic Oscillator: A Mechanical Indicator for Forex Trading
One of the good features of this system is that it is mostly a mechanical system. It means it doesn’t need too much analysis and interpretations.
All you have to be careful about is the strong support and resistance levels on the markets and waiting for their breakout while Stochastic Oscillator is on the right position.
Following this system on the longer time frames like daily and monthly can be so profitable.
It is not the matter of the number of the trade setups. It is the matter of the profit you can make through each trade setup.
Do you agree or you are still looking for a trading system that generates several trade setups every day? 🙂
USD has started going up after the US elections. There are some important fundamental reasons behind this. However, the market is still hesitant and bulls haven’t gained enough confidence yet.
One of the factors that can inform us whether bulls have become confident enough to take the control and establish an uptrend, is the breakout above the current resistance levels on the longer time frames like weekly, monthly and also daily.
However, if it breaks above some resistance levels, it will be more probable that it forms the other half and finally forms a complete Cup and Handle pattern on USD/CHF monthly chart:
If you zoom in and take a closer look at USD/CHF monthly time frame, you can find some resistance levels that their breakout can be known as the beginning of an uptrend (although I believe that some of these levels are not as strong as what they have to be.)
The first resistance level is at 1.0327. That is the one that doesn’t look strong enough, but the market is reacting to it which means although it is not strong, it is important to the market.
As you see, the current monthly candlestick has already tested the 1.0327 level and has reacted to it:
You can see the market’s reaction to this level in more details on the weekly chart. You can also see a smaller resistance level at 1.0255 on the weekly chart
It seems USD/CHF market is reacting to both of these levels:
Those who don’t feel confident enough to buy if USD/CHF breaks above the 1.0327 level, can wait for the stronger levels breakouts at 1.1731 and 1.2296.
Of course please note that the Stochastic Oscillator has to be on the overbought area when the resistance breakout occurs, otherwise one of the important conditions of our Stochastic Oscillator trading system is not met.
Good luck 🙂