A lot of short-term forex traders find that one of the most profitable trading methods is to focus on entering positions around key support and resistance levels. This is because the markets are greatly influenced by these specific levels.
Most charting packages allow you to add these pivot points to your charts. After doing so you will instantly see each of the major 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 can also construct 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 standard pivot points will suffice because these are used by lots of other traders all around the world.
You can trade these significant support and resistance levels by keeping an eye on the price movements when it approaches each of these levels. For instance 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 opening a short position if the price suddenly moves strongly downwards because it has clearly struggled to break through this resistance level.
You can also use these support and resistance levels to determine where you are going to exit your current positions because the price will very often go on to test them before bouncing back again.
So there are lots of ways you can profit from support and resistance levels when day trading the forex markets.