• Nial Fuller

    NIAL FULLER Nial Fuller
    Professional Trader, Author & Coach

    How To Trade Key Chart Levels in Forex

    p.a-picToday’s Forex trading lesson contains trading strategies that you can put to use immediately in the markets. We are going to discuss how to trade price action from key levels in the Forex market. Key levels occur in a variety of market scenarios, and we can combine these key market levels with simple price action strategies to obtain a high-probability trading strategy.

    Key market levels are the core foundation of all technical analysis and price action trading. By focusing on the raw price dynamics and key levels in a market, we can remove the clutter and confusion that so many trading systems and strategies are full of, and instead trade from a clear and objective mindset. I cover all the concepts discussed in today’s article in greater detail in my trading course, as well as a plethora of other simple yet highly effective trading strategies.

    Note: All charts in this lesson reflect the daily time frame.

    Trading from support and resistance in trending markets

    Trading with the dominant daily trend is the primary technique I use to trade the markets. Much of my course is dedicated to trend analysis and teaching traders to trade simple price action strategies in the context of a trending market. We can look for price action signals forming near levels of support and resistance that develop as a result of the natural ebb and flow of a trending market.

    In the example chart below we have the daily GBPUSD showing about the last 4 months of data. What I have done here is simply drawn in the obvious key support and resistance levels and then highlighted the valid price action trade setups that formed near these levels. No magic or “robots” here, just simple common-sense trading using the natural dynamics and levels in the market:



    Trading from support and resistance in range-bound markets

    Unfortunately, the market is not always trending, in fact it’s often said that markets spend more time consolidating and moving sideways than they do in trending conditions. Fortunately, with knowledge of how to trade simple price action setups from key levels, we can effectively trade range-bound markets as well.

    In the example chart below we see the daily EURUSD from about the end of May to mid September of this year. We can see an obvious trading range that developed in this period of time and some price action setups that formed off the support of the range. Note that just before the trading range finally broke out lower, a long-tailed pin bar formed that showed rejection of the interior of the range, once the low of this pin bar broke we saw a significant move lower. Trading ranges can be a bit erratic but if you watch the boundaries of them closely you will often see some solid price action signals form at the key support or resistance of the range.

    Trading from swing points in trending markets

    As a market makes new highs or lows it forms what I call “swing points” in the market, these are very important levels to watch because they essentially create new support or resistance. As such, a swing point does not need to be “confirmed” by multiple rejections of price in order to be considered a valid support or resistance level, rather the actual swing in the opposite direction itself creates a new level of support or resistance.

    When we see price approaching a recent swing point we can be on alert for price action setups forming near it. A recent swing high will often act as support in an uptrend, and a recent swing low will often work as resistance in a downtrend. Let’s look at a chart to see this more clearly.

    In the example chart below we see the daily EURUSD from about mid-August until now. We can see that price came down and found support near 1.3600 in mid-September. This swing point then became very important for the subsequent price action forming near it, acting both as support and resistance.

    Trading from dynamic EMA support and resistance in trending markets

    I use exponential moving averages (EMAs) on the daily charts to help with trend analysis and identification of dynamic support and resistance levels. For today’s lesson I am going to discuss how I use the daily 8 and 21 EMAs to highlight key levels in the market to trade price action from.

    In the example chart below we have the daily EURUSD showing about the last 4 months of data. I have applied the daily 8 and 21 period EMA’s (applied to close) and then I simply watch for price action setups forming at the EMA levels or in between them, in the EMA “layer”, when the market is trending. When the EMA’s are crossed lower and diverging, we have downward momentum, and when they are crossed higher and diverging we have positive momentum. By simply looking for price action setups forming on the EMA levels or within their support or resistance layer, we can easily identify high-probability key levels to trade from.

    Trading from event-area support and resistance levels

    An event-area is a price level or zone that saw a price action signal form and then a large directional move or “event” occurs. These levels are obviously very significant and I discuss different ways to trade them in my price action trading course. But, for today’s lesson I am going to show you how to trade price action setups from event areas.

    In the example chart below we have the daily XAUUSD (spot gold) chart showing about the last 4 months of data. We can see a good example here of an obvious event-area that formed through $1700.00 as price rejected this level multiple times forming well-defined pin bar strategies that subsequently set off significant directional moves. When you see an obvious price action signal that sets off a large move, you can then watch the level the price action signal formed at for future entries if price approaches it again, as these levels are obviously quite significant.

    As you can see from the examples above, trading does not have to be complicated; you can learn to analyze the market and trade effectively by simply gaining knowledge of how to identify key market levels and price action setups. When we combine these two components we get a very high-probability and simple trading strategy that is also flexible enough to be applied to the ever-changing conditions we see in the Forex market each week.

    We cover all the key market levels in the major Forex pairs in our daily members’ commentary each day. These ‘key levels’ are essentially the foundation to what I teach my students in my Forex trading course and members’ materials. I believe price action trade setups have a much higher probability of working out in our favor when we look for them at these confluent key levels in the market.

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    Nial Fuller

    About Nial Fuller

    is a Professional Trader, Investor & Author who is considered ‘The Authority’ on Price Action Trading. His blog is read by over 200,000+ followers and he has taught 25,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition. Checkout Nial's Professional Trading Course here.
    Nial Fuller Professional Trading Course Preferred broker 2020 v1
    1. Mahlomola

      Thank you very much for the powerful article it is indeed enriching my knowledge and making me a much better trader

      Reply
    2. Gregory Scafuto

      thanks exchange for sharing

      Reply
    3. Megarich

      Mr Nial, you deserve more accolades than I can possibly render. Thanks a million times sir.

      Reply
    4. Harrison

      Hi Nial
      Your work is so refreshing. It’s a masterpiece.

      Reply
    5. I Wayan Darya

      Great and comprehensive,,,,,

      Reply
    6. Shirantha Sudarshana

      Thanks mr. Nial. Could you explain the difference between swing point and event area that you given examples in this lesson. That levels looks like same when responding to a certain price. It would be great pleadure if you explain this by a lesson in future.

      Reply
    7. Ugwoke Alexander Oloto

      Please Mr. Nial, how do we know all these inside, fakey, pin bars you refer to? I do not know how to identify them. Please help me.

      Reply
    8. akhtar butt

      Hi. Wonderfull. and comprehensive.

      Reply
    9. Hasan

      How can I find support and resistance levels?

      Reply
    10. Mohd Radzi Bin Idris

      Dear Master,
      Good sharing and thanks.

      Reply
    11. nalaka

      greaat thanks

      Reply
    12. Magar

      Great Nial. Thank You So Much.

      Reply
    13. Emran M

      Hi NIAL,

      I have learned a lot from you and succeeded in Trading.

      Thank You so much, & keep up the good work.

      Reply
    14. Peter R

      Hi Nial,

      I joined last week and have just read this article and the “how to filter…..” article.

      Each article I read makes me progressively more certain that the cost of this course is the best money I’ve ever spent!

      The charts you include are excellent.

      Both these article have cleared up some big trading problems for me.

      I feel very fortunate to be receiving this wisdom.

      So thanks for sharing your AWESOME work!

      Peter.

      Reply
    15. Your articles are great! its so simple and easy to understand! God bless and more power!

      Reply
    16. Jesse

      That was outstanding. Never seen charts taught like that before, would love to learn how to do it.

      Reply
    17. Rohani

      Dear Nial,
      Awesome write up. May God bless you more.

      Thank You.

      Reply
    18. Awofeso

      Thanks Nial.

      Reply
    19. Udoaka

      Hi Nial, I would like you to display the sample chart you made mention in this lesson. Please, keep up in your trading analysis as I’ve found your work improving my trading immensely, I do anticipate to sign in to your forex membership trading course. Thanks.

      Reply
    20. James Nkalubo

      Dear Nial,
      A lot of guys have abandoned the scriptures but we who are still believing in them know that giving is more blessed that taking. Niel you are giving so much and as a result your enterprise will flourish greatly.

      James.

      Reply
    21. Eve

      Wellness trading for wellness life

      Reply
    22. val

      wow!makes lot of sense sir!

      Reply
    23. Sachith

      Great article sir…..

      Reply
    24. oyekunle

      may God reward you because you are just beyond human reward for all your limitless effort for newbies.Thanks your lecture is great.

      Reply
    25. celestine

      Hello Nial, you are really great!Each time I sight an inside bar in the Daily chart and in the direction of the trend,I normally scroll down to the 4hr chart and wait for a formation of an inside bar and the break of the inside bar before I enter the trade.I do this because it reduces the amount of pips I use as my stop loss.Is this a good practice?Thanks and remain great.

      Reply
    26. kamal

      IT’S Excellent

      Reply
    27. oduor sadia

      excellent Nial

      Reply
    28. seun

      Thanks Niel for all your post so far.

      I am new in the game. Although I have a little experience.

      I need to know how to get my key support and resistance regions.

      Although, i draw so many resistance and support region on my platform as an intraday trader, but still find it difficult sometimes to identify the key support and resistance regions.

      Thanks

      Reply
    29. Raj Jadeja

      Simply awesome, Nial

      Raj

      Reply
    30. Sudip Ahmed

      Helpful and informative article Nial, i have a question, can i use this set up in a lower time frame like H4 or H1 please?

      Reply
    31. eric

      I do agree for that simplicity. Thanks nial for your valuable lesson all this time. I always wait for your great lesson. Thanks

      Reply
    32. ohuizu

      Hi Nial your website is great

      Reply
    33. Galen

      Good read Nial

      Reply
    34. Gurpal

      Hi Nial,

      Hope you are well. Thank you for another fantastic and awesome lesson.

      Thank you for all your help

      Thanks and Regards

      Gurpal

      Reply
    35. adewale

      a brilliant effort by our exquisite mentor.Am greatful for your undiluted insight about tradethe market.

      Reply
    36. mahai

      Just starting out and learning to “master” one method at a time. Thanks for your help. BTW, which method do you recommend to learn first? I am now trying to learn inside bars, but not sure if I should start there. Thanks again!

      Reply
    37. isiakaoyeleke

      what a wonderful lesson for free of charge.May God bless u more

      Reply
    38. Henry Supriyanto

      Thanks Nial…make me very clear…

      Reply
    39. Anthony uche

      This is amazing, wonderful writup, remaim blessed nial and merry christmas in advance.

      Reply
    40. Mohammad Kavoshnia

      Hi Nial,

      A very useful and informative e-mail;thanks.

      Reply
    41. Larry H.

      Nial,

      Thanks for this Christmas present. Hope Santa is half as nice to me! Larry

      Reply
    42. barry

      Hi Nial Great Lesson as always.

      Im starting to use some price action techniques with Fib Levels which have been working well on the long term chart.

      Reply
    43. Dorcas

      Indeed you really go by your vision learnig to Trade the market. since i have been reading your articles it has improved my discipline and knowledge. you are an ICON to be recon with to be successful in Forex trading. thanks

      Reply
    44. olajubbu

      You are a nice man .I like this article

      Reply
    45. bill presslor

      thank you for helping us with our trading

      Reply
    46. AMIN MALIK

      Hi NIAL Your approach to ANALYZE the market is so simple
      and logical, that, it has made the whole difference to my
      trading.Thank you so much, for your dedicated efforts, to
      help TRADERS at large. MAY GOD REWARD YOU!!!

      THANKS & REGARDS, AMIN MALIK

      Reply
    47. leonel

      Thanks, but i like to see it on video,is easy for me.

      Reply
    48. Craig

      Thank you for all the effort you take to educate us Nial.You are a great mentor.

      Reply
    49. Wmwanikis

      simple and very well explained. thanks Nial.

      Reply
    50. QED

      Thanx Nial, ive been asked to help people set up charts ,now I just give them ur site “well done and many thanx “

      Reply
    51. Ramli

      thanks n great trading guide.

      cheers

      Reply
    52. Fran A.

      Brilliant! Thank you very much, for your dedication, your generosity, your clear way in plotting and explaning the important. Thanks, again.

      Reply
    53. Andy

      I am amazed how you always simplfy trading while others try to complicate it!

      Reply
    54. henry

      thanx for ur wonderful support.

      Reply
    55. Isah AA Bokuta

      You are an exllent teacher

      Reply
    56. Herb

      As always Nile…Thank you for the efforts you make on our behalf…I find the instruction most understandable and insightful. I trade a very small acct so have a harder time trading the daily charts, but I find the principles applicable to lower time frames after gleened from the day charts. Again thanks for your investment in our success.

      Reply
    57. SAMM

      This’s an excellent and unique article,tanks sir Nial for this insightful one.

      Reply
    58. Steve20555

      Its great to read your lessons, they make things so clear, and your course has helped me tremendously.
      thanks Nial

      Reply
    59. Zaida Khan

      Thank you very much for such a simple, comprehensive and easy lesson. From the bottom of my heart, i appreciate your dedication to impart the knowledge of forex trading to the newbi.

      Well done

      Reply
    60. Reza

      Clear, concise and complete. Super job, Nial!!

      Reply
    61. Michael D

      Another very good lesson Nial. Simple, concise, clear and realistic/ practical.

      Reply
    62. Keith(from england)

      Hey Nial another great insight into how you trade. It seems so simple when you put it down like this – clutter free and logical. Since discovering you on you tube I have changed my whole strategy and mind set. Thanks to you I now know i’m on the right path.
      Thank you.

      Reply
    63. Kav

      Thanks Niall. Although I don’t trade by your exact methods, your price action fundamentals is the basis of my trading philosophy.

      Reply
    64. Tony

      Great articles, thankyou.

      Reply
    65. George

      I also appreciate your dedicated time & efforts in helping us traders excel.
      Thanks Nials

      Reply
    66. ken

      hi nial,
      just looking up the strategies you post online and the tutorials have change the way i look at trading.i look forword to joining you community very soon.
      thank for this lecture.
      ken

      Reply
    67. tim

      thanks always on point

      Reply
    68. Lucas

      I must say there is much learning in just by looking at the charts than placing trading it takes patients for one to know how to spot swing points and entry and exit points and eventually the whole thing becomes a part of you like a religion or something of sort you live breathe dream it until it becomes effortless thanks Nial

      Reply
    69. Lionell Dixon

      Thanks for todays lesson Nial. For as long as I’ve been studying your material I’ve gained knowlege that probably couldn’t been taught a better way not even by a professor from a university. Believe or not this site is actually a life changer for me. I appreciate your dedicated time and effort in helping traders to excel in the fx market.

      Reply
    70. Greg

      thanx Nial, an excellent reminder!!!!

      Reply
    71. Maurice

      Excellent summary Nial

      Reply
    72. graham

      Niall,
      This is really the epitomy of successful 4X trading.In a nutshell,very simple,clear positive directions.
      I truly believe that you have provided the most successful 4x trading training and i am really proud to be a disciple of your method and because of that my day job is in severe jeopardy.
      thanks again for a great course and not to forget the excellent contributions from forum members.
      Cheers GrahamD

      Reply
    73. Nyoman L.

      Comprehensive and excellent, as always. This kind of insights are always needed.

      Reply

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