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How to Use Barriers to Land Awesome Trades In the Forex Market
To learn the ways in which traders can determine areas where multiple barriers are can make a trader a good profit. Various kinds of cost barriers are in the FX market. It is ordinary for currency pairs to change direction at these barriers. By learning how to put them together, people who trade can develop a plan of trading with higher probabilities of success. Some barriers include support and resistance levels, psychological barriers, and Fibonacci levels. Barriers on trend lines and at pivot points can also enhance our observation. Now lets look at the various kinds of barriers that are common in the Forex market.
Support and Resistance Levels
Support and resistance levels are huge changing points that the market has always used in the past. The more times the market has used them, the stronger they are. Support is seen as the changing point where the buyers put themselves at the top which made the currency pair go up. Resistance is any level at which the market finished rising and turned down. Support and resistance levels on bigger time charts are considered more significant than those on smaller time charts.
Psychological Barriers
Psychological barriers are seen as huge numbers. A number ending in 50 or 00 is a significant barrier. A number ending with 000 is more significant. You will be amazed at how much a currency pair exhausts itself and changes direction within a few pips of a psychological barrier.
Fibonacci Levels
Fibonacci lines are used a lot to determine if a point has the potential to reverse. Start with bigger time charts and make Fibonacci lines on major moves. Go down and mark all smaller moves. See where the Fibonacci lines, psychological barriers and support and resistance lines agree with one another.
Trend Lines
Draw trend lines to put a mark on all major moves and then go and mark the trends that arent quite as big. Where they exist, mark your parallel trend lines also. To mark them, draw lines along the lowest points of an upward trend and make lines following the tops of a downward trend.
Pivot Points
Most charting packages have either a calculator or a tool that makes your points where it can pivot. These are areas at which the currency pair is likely to turn. Most tools and calculators give you many numerals both above and below the present levels of the currencies you follow.
Making lines to mark the various barriers that we always encounter in the foreign currency market help us identify the points that a pair will most likely change. Take note of those levels where many barriers correspond. This increases the probability of making trades that will make us money. If you have many barriers that connect at a certain point, then it is very significant
To learn more information about these barriers and their use on your charts, check out our website and www. lotsofpips. com. JARED PASSEY has worked with hundreds of forex traders, has created several successful high probability trading strategies, trades professionally AND manages a foreign exchange fund. He loves helping other traders and holds a free weekly online forex trading club. (You may use this article on your website only if the above link is in place. )Topics related articles：


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