First support Test / First Test of resistance or FTS / FTR is a super powerful business strategy to make price actions traders entering high probability trades when performed correctly. As I'm about to happen in this lesson; By taking rollbacks, it is crucial to be taken from a balance and an area of market value. Like any good business in everyday life, Forex is no different in that to make money traders need to buy cheap (cheap) and sell high (high) to make money.
RECOMMENDED BROKERS
ETORO - XM - OLYMP TRADE
A big mistake that many traders to enter reversal operations is entering the end of big money, just as the great have achieved their profits and are gaining in their operations. Instead of making it easy and buy low and sell high, traders often buy high and then seek to sell even more. The first test strategy, when used in the correct time frames and performs well, ensuring that operators are traded daily from a key level and a balance.
What is the first test trading strategy support / resistance?
The First Test Support (FTS) or First Test Resistance (FTR) is a strategy of price action used to start operating from areas of very high probability with the recent boost when the key support or resistance level is more likely to be keep up.
The price often exceeds key levels and can be difficult for operators to know what levels will be maintained and which are not and what levels hunt in their operations. Operators price action should always use signals trigger action price quality and bars pin A + to confirm any configuration action potential at key levels prices that they do not blindly, but when using the method "First" increases the chances that the level is simply hold because of the way the order flow consists markets; more about that in a moment.
In other words; the price breaks through a key support or resistance level and then retraces to test the same support or resistance always as a new level. This is known as flipping old support prices or becoming a new resistance or an old resistance becomes new support.Another example would be the price breaking a support level and lower moving. Then the price goes back again to try the same former support which is then maintained as a new resistance level where traders can find short operations in the former support, now a new resistance.
With the first test stand / First resistance test, the same method is used, accept that this strategy only exchanges take place in the first setback with the support or resistance and not the second, third or more. This is very important and explains why below. While you can still play great deals when the price rejects the support or resistance for the second or third time, this strategy is to establish an operation high probability after a quick retreat and look for the price to make a really fast reverse through key area, is not a long wait for the price to make a new test.
Why FTS / FTR gives a higher probability of retention level?
Before proceeding, explain how traders can use this method and the time limits within which should be out this method, you must first explain how and why it works. The reason is most likely that the price reject the support or resistance and maintained in the first test, rather than on the 4th, 5th or 6th test, it is simply because supply and demand are built behind areas of support and resistance. Levels of support and resistance are important increases in supply and demand, and where supply and demand are constructed to a level where the order flow has reached a turning point.
Each time the price assesses a level of support or resistance, is absorbing increasing the supply / demand market. Unless the supply / demand be replaced by new orders, the level becomes weaker because less supply / demand will be tested each time. The easiest way of thinking is like a group of bulls and bears, each in its own support and resistance lines with bulls protecting support level and bears protecting their level of resistance, not wanting the price moves through its level. Each time the price resistance test, carries a pair of bears each time more and test support a few bulls are most needed and unless either bulls or bears can find reinforcements,
The first test level is when the supply / demand will be at its highest point since the price has not yet been tested and this is the reason why the first test level is the best time to look for a signal and make one trade.
It is very important that operators mark their levels on the daily chart and also see the price on the daily chart. This will not only ensure that the levels are really strong key levels where the price is clear, but also ensure that when operators fall listed on a chart intraday smaller, can have full confidence that the price has broken a daily chart.
Once the price has broken a key level on the daily chart, then it's a matter of waiting to see if the price begins to return to the previous level of support / resistance. For example; if the price is lower and outside daily support level broken, then the operator would be looking for a price to go back up for a test of the previous / new resistance support. Remember we are looking for a quick trial and a first resistance test. In the daily chart, we should see the decline in prices and test the level in the coming days. We are not looking for a price to make a lower long break and then come back in a few weeks, we are looking for a new rapid test. See the table below for an example;
The following example shows how the price table in the daily chart broke below the transparent support area and then, in a few sessions, performed very fast to the same area above support backward. This is what traders are looking for. Traders are looking for an obvious breach of a key area daily and then a quick test first resistance or support first test on the daily chart. Not long distance and then back in the coming weeks that traders are looking for, but the fast break and retreat that operators are alert.
The second example is similar but with higher price through the resistance, and then backing down quickly to the first test support. Price was making a clear upward movement, he broke the resistance and then quickly returned to FTS where operators would then be in maximum alert.
Move to smaller time frames to trigger signal
Once the operator has found that the price on the daily chart is moving to retest the daily level, it is time to move to smaller intraday frames, such as graphics 8 hours, 4 hours or 1 hour, etc. ., to look for a trigger signal to enter a trade. Because the price has dropped dramatically in the daily chart, there will be room to play an operation on the daily chart. Exchanges of high probability reversal points must be in balance. Go down to the smallest intraday charts will allow the trader to make an exchange with the space and from a balance, while taking key daily trade area that is the first resistance / support test.
Example 1:
The first chart is a daily chart that shows how the price first broke through a key daily support level and then retreated quickly to test the first resistance. This new rapid test is exactly what they want operators with this strategy because, although they can make other exchanges high probability when the price moves away and then retested support / resistance over time, this method can perform operations fast intraday time frames with the momentum of key levels. daily chart
This second figure is the 1-hour chart of the same pair as above. When operators begin to notice prices making a first test resistance on the daily chart, they need to start looking configurations in their intraday charts and is where shows how the price moved higher and towards the same resistance daily key and formed an investment solid bar pin. This pin bar would be the signal for operators enter a short operation and enter a high probability configuration. So traders should also take into account is how the daily chart there is no space,
1 hour chart
Example 2:
This example uses the daily chart above example in the lesson. This is to show how after the price has soared to FTR operators have been looking for operations in their intraday charts for configurations of price action trading high probability. Figure 2 hours the formed a huge submersible bar downward (beeb) stood out like a sore thumb in the FTR and exploded.
daily chart
2 hours chart
Summary
For this strategy to work, it is very important that operators first mark really good level and then be alert when the price has broken its key daily levels. Levels of support and resistance in trading price are really crucial components and some operators continually need to check your charts every day and make sure they are in the right places.
As we discussed in many of our trading lessons; this strategy is no different, because you still have to choose the best settings and still have to let the market come to you. Do not force the settings when they are not made, but this strategy can be a super powerful strategy when done well. I really hope you can take this strategy and practice, practice, practice until you do yours!
0 Comments: