Support and Resistance: simply put, support and resistance are areas on the chart where we expect to see buying or sell. These areas are most commonly portrayed as lines on a chart. Less commonly they are portrayed as areas (such as the Ichimoku cloud).
When PipHut was first founded back in 2008 our S/R (support and resistance) lines were so exact that we got emails daily asking us to send them the indicator we used to draw them. Unfortunately for them we don't use an indicator - our Chief Strategist analyzes the charts using a variety of high probability technical properties with a healthy dose of years of experience and hand-draws the S/R lines. Fortunately for you, you get access to all of our S/R charts, updated every 10 minutes, inside of the PRO Dashboard. This makes trading S/R lines with CandlePRO simple.
The strategy for using CandlePRO with S/R lines is simple - wait for price to get near support or resistance and then wait for a candlestick to appear in the direction of the S/R. So for example a bearish candlestick under resistance or a bullish candlestick over support. And with PipHut's email alerts this means you don't have to be camped out in front of your computer 24/7 to take advantage of this strategy.
Step 1: View CandlePRO Signals
Lets start by looking at a generic CandlePRO signal:
There are a few things we like about this signal right away: 1) it is a "double", meaning either the EU or AU is forecasted for the same direction, 2) it has a high profit factor of 10.59, which is very high (1.0 is break even) and 3) it's formation strength is 82/100, which means this signal occurs at the bottom of a dip (where the best reversal signals are).
Step 2: Click "S/R Charts" button
Now lets take a look at where this candle is relative to PipHut's Support and Resistance lines by clicking the "S/R Chart" button at the bottom of the signal:
Notice how the current price is resting right on top of the rising blue support line? That's good for a bullish signal! If you are subscribed to our swing signals you have already received a "proximity alert" email!
Step 3: Set entry, TP and SL levels
Now lets click the "Backtesting" button to help us set our entry, TP and SL levels:
The top backtesting rows are always the "Pullback" strategy numbers (meaning you don't enter until the price pulls back a certain amount to get a better price) and in this case they look pretty darn good, especially the top two. The top row lists a pullback of 26 pips (meaning our entry would be at 1.5358 since our signal closed at 1.5384 [1.5384 - 26 pips = 1.5358] ), a TP of 38 pips (1.5358 [our pullback entry point] + 38 pip TP = 1.5396) and a SL of 13 pips (1.5358 [our pullback entry point] - 13 pip SL - 3 pips [your dealer's spread] = 1.5342).
Tip: Place your SL beneath the support or above the resistance to improve your results and lessen the chance that you'll get whipsawed out of a trade.
The pair dipped 40 pips after this signal - enough to trigger our trade but not enough to hit our SL (just missed it!) and then rose 90 pips, easily enough to hit our 38 pip TP and more if you let the trade run.