The Magnet Analogy (Support & Resistance)

One of the principles of my trading system is Support & Resistance, but even if you’re not my client, you will benefit from this info too. 😉

If you Google “support and resistance” you’ll find so many complex explanations that it may confuse some of us, especially the beginners. So I created an analogy to make things practical for day-to-day binary options trading.

You can draw the S&R lines manually or you can use any good S&R indicator. I have a very good one, which is part of my system. If you want it, I’ll give it to you as a freebie. Click on this link to download it: BOL_S&R_indicator

We are going to imagine that those S&R lines are magnets and the candles are made from metal.

How can this concept prevent us from taking losing trades in any trading system? Whenever a system gives you a signal and the candle is close to a support or resistance, but not touching it, we don’t take that trade and (depending on your system) wait until it touches those to then open the trade. If those lines (that you drew manually or used my indicator) are magnets and the candle is a piece of metal, why taking a reversal trade when magnet and metal are close to each other? Chances the magnet will pull the metal towards it are big, right?

Magnet analogy picture

Ps: I don’t suggest you trade S&R alone in Binary Options, but I invite you to observe how price behaves in relation to those lines.

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