Here is another common question we get in our inbox from time to time: How do I draw Support & Resistance Lines?
The answer is simple. Use a Line Chart! In MT4, the Line Chart tool is accessed by pressing this icon
Open your chart and load up the Weekly or Daily timeframe.
Switch over to the "Line" Chart view.
Draw your Horizontal Support Line at an area where price has bounced.
Zoom out of the chart or scroll back and see if price has bounced off that line in the past. If price has reacted to that area in the past then you have identified a significant area of support!
Repeat the process for Horizontal Resistance.
Be sure to scroll back on the chart to see if price has reacted to these areas in the past.
Once you've finished, your chart should look something like this.
Now you can switch back to Candlesticks.
You can then choose to "fill" in the areas using the Rectangle tool if you would like to have potential reversal Zones instead.
When you've finished creating Zones you can remove the lines you've created.
Don't expect price to immediately react to these lines!
When drawing these lines on the Weekly and Daily charts there's a high chance that price won't react immediately when touching those support and resistance lines and may continue on, so don't try and scalp these areas and expect price to immediately reverse once it touches these horizontal lines you've drawn. Remember, we've just used the line chart to draw these lines and the line chart is based on the close of the candle so price could well and truly continue blasting through these levels for hours before eventually reversing.
If you're an aggressive trader you can enter reversal trades right on these lines, but you'll need to use wide stops.
The trick is to be aware when price hits these areas and start looking for reversal trading opportunities from here by loading your chart on the smaller intraday timeframes and enter there.