#316: Using Historical Highs & Lows

 Podcast: Using Historical Highs & Lows In this weekly video: 00:28 – Trader asks a question about using previous highs and lows 01:08 – Highs and lows are set, not subjective 01:38 – Bouncing at a round numbers 02:13 – Factors creating highs and lows 02:38 – How I trade and use highs and lows 03:33 – Using these levels to help us trade better 04:28 – Where to put your profit target? 05:35 – Email me with your questions I'm gonna explain how to use historical highs and lows in the price action to aid you with your Forex trading entry and exits. Let's get into that more right now. Hi traders, it's Andrew Mitchem here from the Forex Trading Coach with the video and podcast number 316. Trader asks a question about using previous highs and lows I've received an email here from Colin. Colin said to me, "Hey Andrew, can you talk about historical prices? Highs and lows, support and resistance, and how they correlate with aiding entry and exit levels within the market." Colin that's an excellent question. Quite simply, we use those levels all of the time. Why? Well, what I love about historical highs and lows is they're actual levels. You can see them on your charts. Everybody can see them. It doesn't matter where in the world you are, what timeframes you're trading, doesn't matter what trading platform you're on. All those type of things. Highs and lows are set, not subjective Everybody can see where the price is stored, highs and lows, where they are. They're not subjective. When you start drawing trend lines … Now, we do use trend lines but when you start drawing things like trend lines, and you're looking at other levels, and certainly when you can't start adding indicators on your charts, they become quite subjective. The settings will be different depending on your price fee, depending on the timeframe chart you're on, depending on your broker. All those type of things, they can be different but highs and lows are there. They're set. Now, when you go a little bit further into them, and delve a bit deeper, you'll probably find that when you look at them, and look at the actual price itself, you'll quite often find that historical highs and lows. Bouncing at a round numbers It's remarkable how often they do bounce at what I call a round number. It's a price level ending in a 00 or a 50. You know, they happen all of the time when you look at your charts. Why? Because that's where the big players are pushing the market. That's where they reverse the market. All those type of levels, the 50s and the 00s, historically become very good high and low levels, bounce levels. Factors creating highs and lows Those highs and lows that you see on your chart may also be caused by other factors. They could be caused by news events suddenly changing the market or they could become like fib levels, Fibonacci levels, all those type of things. When it comes to it though, the actual reality is, sometimes you actually really don't need to know why they've occurred, all you need to know is that they have, and you need to seed them, and be able to use them. How I trade and use highs and lows The way that I like to trade, as you know, I look at individual candle shapes and patterns, where they've occurred and why. The where and why, we now start to add historical highs and lows into that. Let's say that you're buying a currency pair. Let's say you're buying the British pound, US dollar, let's say. It's come down to what was historical low? It may be a low that happened just yesterday, it could be a low that happened last week, last month. Who knows? Depends on the timeframe chart that you're on but you've seen the price come down and it's bounced at a level that, on your chart when you look to the left hand side...