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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.

This is such a strong and reliable system if you wait for the strong support and resistance levels while the Stochastic Oscillator is in the right position.

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.

It seems USD/CHF has already formed half of a Cup pattern. Learn about this pattern: Cup and Handle Pattern in Forex Market

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:

Cup And Handle Pattern USD/CHF Monthly Chart

Cup And Handle Pattern 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:

The 1.0327 Resistance Level

The 1.0327 Resistance Level

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:

USC/CHF Weekly Chart

USC/CHF Weekly Chart

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.

1.1731 and 1.2296 Resistance Levels on USD/CHF Monthly Chart

1.1731 and 1.2296 Resistance Levels on USD/CHF Monthly Chart

Good luck 🙂



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"Whether you think you can, or you think you cannot, you are right." - Henry Ford

35 thoughts on “Trading the Strong Support and Resistance Levels Breakouts
  1. Hi Chris,

    Great article.Thank you.

    About your question “Do you agree or you are still looking for a trading system that generates several trade setups every day?”, I have learned so far that no matter how much trade setups we have taken, we will be profitable only if we take too strong setups, and they are definitely worth of waiting.

    Thanks

  2. Hi Chris,

    I have a question, you said stochastic oscillator should be in overbought position when resistance breakout occurs to go long, is it right to go long (buy) in a market that is already overbought?

    • Hi Jovita,

      Yes. Indeed, many of the strong movements form after Stochastic reaches the overbought area.

      Many novice traders make this mistake and go against the market as soon as they see a reversal signal and while Stochastic is on the over area. Reaching the over area doesn’t mean that the market will reverse.

  3. Thanks Brother i flow 2 years this rule very good working GOD bless you Chris

  4. Very good analysis again, Chris. So glad to see the daily articles these few days.

  5. Thanks Chris.

    What about if, in up trend and the price hit a strong resistance and formed a reversal pattern like bearish engulf, dark cloud, or shooting star do we go short? or not recommendable, and better to wait till it hits a strong support and take it long trade as far as the main trend is UP.

  6. hey criss do u use this system by ur self .. or u stick to only candlesticks+BB system only ?

    Thanks

  7. Hi Chris,

    I just want to wish Merry Christmas and Christmas Eve to you and to your team.
    You are doing a great job here, and I am sure that you have some great ideas for the future,
    because you are the man with a vision.

    Thanks for everything 🙂

    • Hi Ben,

      Thank you.

      Merry Christmas to you too 🙂

      Thank you for being around and thanks for your supports.

  8. 24/12/2016 GBPJPY Weekly Bearish Engulfing Pattern With Bollinger Upper Band Breakout & Price Rejecting 50 SMA As Well 🙂
    https://goo.gl/SvUd9s

  9. hey sir Criss .. is this the right time to take trade .. because its 100% exactly same situation on EUR/USD weekly chart as U described in this article ..
    here is screen shoot ::
    http://prntscr.com/dnr5je

    • Hi Lala,

      We don’t give any trading advice here. We merely analyze the market for the educational purposes.

      • sir I am not saying for trading advice .. plz just take a look on image and tell is that right ?

  10. hey sir is this right wave count on USD/JPY weekly chart ?
    http://prntscr.com/dnrfcz

  11. Sir Criss plz don’t dlt this comment .. and must reply …
    Sir today market opened and my Stop losses triggered for no reasons .. even they were far away from current price . Sir its seems like My broker is cheating me and hunting stop losses ..
    here are the image : (U can see stop losses triggered even price did not reach to my stop losses levels . even if I add current spread too .)
    http://prntscr.com/dnv5rm
    And
    http://prntscr.com/dnv64h

    Sir plz must reply in little details .

    Thanks

    • I can’t say that your broker cheated you. The spread is usually high at the market open and when your stop loss is too tight it can get triggered easily.

      • Sir plz see image again .. SL is more than 80 pips … and how is than possible that market open with gap downward and SL will hit from upward … its mean 80 pip SL+ GAP pips .
        another thing about my broker sir , he said he is true ECN broker .. but he is supporting 0.01 lot …

  12. Criss I have A Question if U don’t mind ::

    why did U deleted this article ?

    https://www.luckscout.com/a-forex-trading-plan-limit-your-greed-and-make-53000-per-month-after-two-years/

    this article is redirecting to another old 2012 article …

  13. HEY sir Marry Cris-mess … 🙂 wish u happy , healthy and more prosper life !

    sir plz take a look on this set up AUD/CHF .. is this is strong trade set up ?

    http://prntscr.com/do4woe

    what positive and -ev point u see in this set up and how many numbers u will give to that set up ?

    2nd : sir I wan to join club , do u post daily market analysis in member area ?

    Thanks

  14. hey do u use this system on daily chart by yourself ? or U use only this system on weekly & monthly chart ?

    I am talking about Stocastic+S &R breakout system …

    thanks

  15. HEY CRISS HAPPY NEW NEW YEAR ! …

    ======

    sir may be this question is off from the topic .. but plz ans this question ..

    >> I read a lot about being disciplined trader and I am still not clear about its exact definition .. what exactly mean “being a disciplined trader ” ..

    Sir is its mean

    — not deviate from system rules and follow them religiously..
    — wait patiently for strong trade set ups and don’t start looking for another system that can give more and more signals when a trader is not seeing any signals from few days ….
    — not taking a lot of risk !
    — and when stop loss hit then dont start doubting system
    –no matter how many days he not make any money … but he mush hat to wait for strong set up … and not push himself to trade to make money !

    Thanks

  16. hey sir ..

    when S or R level will broke and Sto will in in over area

    .. I have to enter immediately or wait for S or R level retest ?

    what is safe ?

    I entered immediately on weekly chart after broke R level and price spike back and Hit SL …

    image :: http://prntscr.com/dps13t

    Thanks

    • Your SL was too tight then.

      Some traders wait for retesting to have a safer position. Some enter after the breakout.

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