SUPPORT/RESISTANCE LEVEL AND OSCILLATORS
Trading strategy with the use of support and resistance levels and the indicator MACD can be used for all currency pairs. Recommended timeframe – H1.
The settings for MACD indicator are as follows: fast EMA 12, slow EMA 26 and MACD SMA 9.
First of all, we construct support and resistance levels for the selected currency pair on the chart. A transaction can be opened after breakdown of the support or the resistance level provided that the candlestick opens either above or below the level of support/resistance. If a candlestick opens above resistance level, we open a buy transaction and likewise, when the candlestick opens below support level, we open a sell position.
Oscillator MACD is used to confirm a buy/sell signal. We shall trace the directivity of the lines of MACD oscillator. If, at the time when the price breaks down resistance level at least two line of MACD histogram will be directed upwards, we will get a buy signal and on the contrary, if at the time when the price breaks down support level, at least two lines of the histogram will direct downwards, it gives us a sell signal.
The fig.2 clearly shows the entry point for the buy position in accordance the described conditions.