Today we’re going to talk about the support and resistance level.
It is essential to be able to see the support and resistance level
because you can find a pivot point and make a nice short term profit.
A support is a virtual barrier that prevents the price from falling.
A resistances is a virtual barrier that prevents the price from
increasing.
If the price of the currency breaks the support, than the support
price becomes the resistance. The same is true of the resistance is
broken, than the resistance becomes the support. That is a little
confusing, but read it over a few times.
Look at this image to get a visual look.
The best thing you can do is take a look at a candlestick chart and
draw lines from each pivot point for both the support and
resistance. You’ll notice that some lines end up touching more
pivot points than others. The ones that have more touching are the
ones with high competition between buyers and sellers. All that
means is that buyers and sellers are testing the ground out and no
one has won yet.
Here is an image of my lines on a graph.
The highs for the day and the lows for the day are considered the
strong resistance and support levels. You can look at the previous
days levels to get a general idea where it will be today. If things
are calm, everything should remain relatively the same
You can also look at the long term graphs to get a much better idea
if the currency has been increasing or decreasing. With that
information you can slightly adjust your levels.
