Support Turned Resistance-Resistance Turned Support Forex Trading Strategy

The Support Turned Resistance-Resistance Turned Support Forex Trading Strategy is a based on the fact that sometimes, a support level which has been broken will act as a resistance level when price goes back up to it. Here’s an example of a STR.

On the chart below, Notice the the blue area is is the support zone that was broken…

Price went down and later came back up and was pushed back down in that zone. It became a resistance zone.

Support turned resistance

Similarly, a resistance level broken by price tend to act as a support level when price comes back down to the level. Here’s an example of a RTS:

resistance turned support

So that is the basics of what this STR & RTS forex trading strategy is all about.

Timeframes: Any

Currency Pairs: Any

Indicators: you don’t need any

 

BUYING RULES FOR RESISTANCE TURNED SUPPORT

  1. Once Resistance Level is broken, wait until price starts to fall back down to the the resistance level it broke.
  2. Different types of orders can be used to enter into a trade: for buy stop order wait until a candlestick touches the level and place your order 2-5 pips above the high of that candlestick. Buy limit orders can be placed 2-5 pips above the  resistance turned support line. Or you can buy immediately at market once price hits that level.
  3. Place your stop loss 10-30 pips below the resistance turned support line if you use buy limit and market orders. For buy stop orders,  place 2-5 pips below the low of the candlestick that touches that line.
  4. For take profit targets, look for previous significant swing high and place your profit targets within that.
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resistance turned support forex trading strategy

SELLING RULES FOR SUPPORT TURNED RESISTANCE

  1. Once Support Level is broken, wait until price starts to rise up to the the support  level it broke.
  2. Different types of orders can be used to enter into a trade: for sell stop order, wait until a candlestick touches the level and place your order 2-5 pips below the low of that candlestick. Sell limit orders can be placed 2-5 pips below the  support turned resistance line. Or you can sell  immediately at market once price hits that level.
  3. Place your stop loss 10-30 pips above the support turned resistance line if you use sell limit and market orders. For sell stop orders,  place 2-5 pips above the high of the candlestick that touches that line.
  4. For take profit targets, look for previous significant swing lows and place your profit targets within that.

support turned resistance forex trading strategy

DISADVANTAGES OR THIS STRATEGY

  • price does not always come back to a broken support level or resistance level
  • and when it does come, sometimes it does not obey it.

ADVANTAGES OF THE SUPPORT TURNED RESISTANCE AND RESISTANCE TURNED SUPPORT FOREX STRATEGY

  • any trade that goes according to plan tends to give very good risk to reward ratio.
  • the use of reversal candlesticks can really enhance your sell or buy signal
  • this is one trading setup and method that many professional traders use and its worth knowing
  • this is a 100% price action trading and you do not need any other forex indicators