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Support and Resistance lines Trading | Indicator | Formula | Forex | Intraday | Zone | Levels & more:
Hello…how are you?
Well, In this article… I am going to talk about one of the most important chapters in the field of trading i.e Support and Resistance.
No doubt, This is one of the most widely followed concepts by technical analysis experts in the financial market as it helps to find the highest possible uptrends and downtrends.
So, keep reading ahead Support and Resistance lines Trading | Indicator | Formula | Forex | Intraday | Zone | Levels & more.
What is Support?
Support is the price level that acts as a supporting partner for the buyers.
If the price of the stock is constantly in a downtrend then it is preassumed that the sellers won’t be able to dominate any longer as it touches the support level.
The moment the candle touches the support level the candle will bounce back up in support of Buyers.
However, due to Market fluctuations if the candle breaks the support level. it is preassumed that sellers will dominate the market until the next support level.
What is Resistance?
Resistance is the price level that acts as a supporting partner for the sellers.
If the price of the stock is constantly in an uptrend then it is preassumed that the buyers won’t be able to dominate any longer as it touches the Resistance level.
The moment the candle touches the Resistance level the candle will bounce back down in support of sellers.
However, due to Market fluctuations if the candle breaks the Resistance level. it is preassumed that sellers will dominate the market until the next Resistance level.
How to draw Support and Resistance Levels?
Here, to illustrate the Support and Resistance level I am going to use IQ Option.
If you don’t have an IQ Option account click here.
You can also sign up via the form given below.
Now, enter your email, password and click Try Now.
Once you have signed up you land on the IQ Option dashboard.
Now, click on the chart and select candles from the menu.
That’s it the basic setup is over!!!!
Lastly, click on Graphical tools and select the Horizontal line from the menu.
Click on the colours and select your colour for better visibility. Here for illustration, I am going to use yellow.
Now, what you need to do is find a bearish high and bullish high at the same distance for Resistance level.
Similarly, you need to find the bearish low and bullish low for support level.
How to Trade with Support and Resistance?
Trading with Support and Resistance is damn very easy. let’s check some examples.
Given above is a 30 mins chart and lot’s of action has appeared between Support and Resistance level.
At the point, no (1) and (2) The candle has tried to break the support level but however. are unable to do so as the support line act as supporting partners for the Buyers and bounced the price back up.
At point, no (3), the candle touches the resistance level and the resistance level acts as a supporting partner for sellers and bounced the price back down.
Similarly, at point no (5), the candle touches the support level and the support level act as a supporting partner for buyers and bounced the price back up.
So, Trading with Support & Resistance is so easy.
You just need to remember How does Support & Resistance works? and use Rsi or Stochastic to confirm your trade.
So, this is the end of this article. I hope you have found this article helpful.
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