Support and resistance are familiar concepts in not only Forex trading but trading in general as well. As the measurement of support and resistance is an everyday thing; the traders all have their way of judging these patterns. But there is a fundamental principle that you have to learn first.
Once you have mastered the basic techniques of reading the trading charts, you can develop your instincts about gauging these factors. Just like doing the best affiliate marketing course will help you start strong campaigns for programs from My EasyFi and Affiliate Marketing Monks.
When you see any Forex chart, you look at the data going up and down like a heartbeat. The points that are going up and coming down are discussed in resistance and support. We will explain these fluctuations in detail in the following;
Every time the market moves up, it reaches a peak and then goes back down. The peak can be not too high, and it can be the highest in the market, but it becomes a peak because the stock comes back down. This peak is known as the resistance.
Now the market is going down, the lowest point it reaches before the rates start climbing up again are known as support.
The stock market is an institution that controls rates. Many times, it uses support and resistance patterns in the charts to test the market. In a candlestick graph, it will show as the shadow of the candlestick. If you feel that there is an anomaly in the chart or the fluctuation is not explained, avoid acting on it. You need to look for chart changes that seem clear and intentional. Do not jump at every turn in the chart reading.
Every resistance is a Future Support:
When the opposition begins, traders tend to become discouraged because their stock is going down. That is not a right attitude. Every resistance is going to become support I no time. You need to keep an eye for when the slump ends, and the stock starts going up again. Amateur traders are put off by resistance, but smart traders become more focused on the trade.
Frequent Rice Testing:
If a price goes through the same pattern of support and resistance frequently, then the change is a blessing in disguise. You have a definite pattern to work within a system that is inherently unpredictable.
When a peak breaks and resistance occurs, or a slump rises again in the form of support, the next step will be decided by how long the resistance or support had held up its ground. Look carefully at how thick the slump was; prices will also increase accordingly.
Practice makes perfect when it comes to working through support and resistance data. That s why, more you practice, better your results are going to be. Work on resistance and support in your demo account that is the best place to learn this trick!