One of the best ways to trade the forex markets (at least on an intraday basis) is to trade around support and resistance levels. This is because the markets often kick into life around these key points.

All you do is open up your charting software and add pivot points to your charts. After doing so you will instantly see the various different support and resistance levels. This includes the central pivot point, as well as the two areas of support (S1 and S2) and resistance (R1 and R2).

You may like to create your own areas of support and resistance if you really want to, which is what a few top traders at Options University have done as part of the new Forex Mastery course. However for most traders the conventional pivot points will be sufficient because these are used by many other traders all around the world.

You can trade these crucial levels by observing how the price reacts when it gets close to each of these levels. For example if the price strengthens and trades close to the first resistance level, and then consolidates around this level for several hours, then it may be worth taking out a short position if it suddenly breaks downwards because you have already seen that it failed to break through this resistance level.

On a similar note you can also use these key points to determine your exit points because the price will very often go on to take them out before bouncing back again.

So there are many ways you can trade support and resistance levels when trading the currency markets.