Support and Resistance is one of the widely used concepts in Forex trading. Most traders plot horizontal lines to show support levels and resistance levels. There is also an indicator used to plot Support levels automatically and indicate the resistance and support levels.
When it comes to these levels price can either bounce off these levels or break these levels.
- If a resistance level is broken price will move higher and the resistance level will turn to a support.
- If a support level is broken price will move lower and the support level will turn to a resistance.
Price where the majority of investors believe that
prices will move higher, while resistance levels indicate the price at
which a majority of investors feel prices will move lower. Once price has broken through a support level or a
resistance level then it is likely that the price will continue moving
in that particular direction until it gets to the next support or
resistance level. The more often a support or resistance level is
tested or is touched by the price and bounces, the more major that
particular support level or resistance level becomes.
Technical Analysis of Resistance and Support Technical Indicator
These levels are calculated a trend lines method.
In an upward trend the resistance and support will generally head upwards
Downward Trend
In a downward trend the resistance and support will generally head downwards
