Diagonal Support and Resistance

In the financial market, we can observe the diagonal price patterns frequently. Diagonal support and resistance are the typical price patterns we can observe as the results of the combined effect of Equilibrium and Fractal Wave process. Diagonal support and resistance are not different from the horizontal support and resistance. When the connected peaks and troughs provide the diagonal slope rather than the horizontal line, then that slope can be considered as the diagonal support and resistance. However, there can be more variations comparing to the horizontal case. Firstly, we can have the ascending diagonal support and resistance. Secondly, we can also have the descending diagonal support and resistance. For your convenience, we have listed all the possible diagonal support and resistance patterns in Table 2-2. We have also listed the corresponding example for each pattern from Figure 2-6 to Figure 2-13. How to trade diagonal support and resistance levels are the same as the horizontal support and resistance. You can apply the proportional threshold method and the Fibonacci threshold method for your entry for the case of diagonal support and resistance too. The trading example is shown in Figure 2-14. How to calculate the threshold level for Y Buy and Y Sell are identical to the case of horizontal support and resistance. As in the horizontal support and resistance, it is sensible to set your stop loss level greater than the minimum stop level.

Support and resistance Price Action Direction Example
Ascending Diagonal Support Reversal Buy Figure 2-6
Ascending Diagonal Support Breakout Sell Figure 2-7
Ascending Diagonal Resistance Reversal Sell Figure 2-8
Ascending Diagonal Resistance Breakout Buy Figure 2-9
Descending Diagonal Support Reversal Buy Figure 2-10
Descending Diagonal Support Breakout Sell Figure 2-11
Descending Diagonal Resistance Reversal Sell Figure 2-12
Descending Diagonal Resistance Breakout Buy Figure 2-13

Table 2-2: List of diagonal support and resistance patterns for your trading.

Figure 2-6: Support example as in the direct pattern recognition on EURUSD H4 timeframe.

Figure 2-7: Support example as in the direct pattern recognition on EURUSD H4 timeframe.

Figure 2-8: Resistance example as in the direct pattern recognition on EURUSD H4 timeframe.

Figure 2-9: Resistance example as in the direct pattern recognition on EURUSD D1 timeframe.

Figure 2-10: Support example as in the direct pattern recognition on EURUSD H4 Timeframe.

Figure 2-11: Support example as in the direct pattern recognition on EURUSD H4 Timeframe.

Figure 2-12: Resistance example as in the direct pattern recognition on EURUSD H4 timeframe.

Figure 2-13: Resistance example as in the direct pattern recognition on GBPUSD H4 timeframe.

Figure 2-14: Resistance Trading example as in the direct pattern recognition on GBPUSD H4 timeframe.


About this Article

This article is the part taken from the draft version of the Book: Scientific Guide To Price Action and Pattern Trading (Wisdom of Trend, Cycle, and Fractal Wave). This article is only draft and it will be not updated to the completed version on the release of the book. However, this article will serve you to gather the important knowledge in financial trading. This article is also recommended to read before using Price Breakout Pattern Scanner, Advanced Price Pattern Scanner, Elliott Wave Trend, EFW Analytics and Harmonic Pattern Plus, which is available for MetaTrader 4 and MetaTrader 5 platform.

Below is the landing page for Price Breakout Pattern Scanner, Advanced Price Pattern Scanner, Elliott Wave Trend, EFW Analytics and Harmonic Pattern Plus. All these products are also available from www.mql5.com too.

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https://algotrading-investment.com/portfolio-item/advanced-price-pattern-scanner/

https://algotrading-investment.com/portfolio-item/elliott-wave-trend/

https://algotrading-investment.com/portfolio-item/equilibrium-fractal-wave-analytics/

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