Placing Support and Resistance Areas

Why Do Market Movers Place Their Orders At SR?

Good traders don’t randomly place entry orders and hope that they get lucky. They place their entry orders at significant price levels. Significant levels come in many forms.

• Yearly, monthly, weekly highs or lows.
• Rounded numbers such at 1.0000 and 1.0500 (also called psychological levels)
• All time highs or lows.
• Areas in which price has stalled or reversed more than once.

In the GBPUSD chart example above, we can see that price has stalled at the 1.3070 twice (green highlights). The next time it approaches the level it pulls back again and then again two more times (yellow highlights).
Why?
Because market movers place their buy orders at the 1.3070 and when price hits the area the buys trigger causing a reversal.
This happens all the time on every Forex pair and in every financial market for that matter.
This is how markets work, buy and sell orders are grouped together in the same general area and when they are hit we see the impact on price.