Where Should I Place a Stop-Loss using Support and Resistance Levels in Forex Trading?

A trader can use support & resistance levels on the forex chart to determine where to place their stop loss orders using the techniques explained on the example below:

Determining Where to Place a Stop Loss using Resistance Levels in Forex Trading

One way of setting stop loss orders is to use resistance levels, on the forex charts.

Given that stop loss orders tend to congregate at key points, when one of these resistance levels is touched by the price, other orders are set off.

Stop loss orders tend to accumulate just above the resistance areas.

A resistance level should act like a barrier for price movement, this is why the resistance zone are used to set stoploss orders.

If this resistance level is broken the price movement can go toward the opposite direction of the original forex trend, but if this resistance level is not broken the forex price will continue heading in intended direction.

Stop Loss Level Setting using Resistance Levels in Forex

Setting Stop Loss Order above the Resistance Level

Determining Where You Should Place a Stop Loss Order using Support Levels in Forex Trading

Another way of setting stoploss orders is to use support levels, on the forex charts.

Given that stop loss orders tend to congregate at key points, when one of these support levels is touched by the price, other orders are set off.

Stop loss orders tend to accumulate just below support levels.

A support zone should act like a barrier for price movement, this is why these support levels are used to set stoplosses.

If this support level is broken the price movement can go toward the opposite direction of the original forex trend, but if this support level is not broken the forex price will continue heading in intended direction.

Stop Loss Level Setting using Support Levels in Forex

Setting Stop Loss Order below the Support Level