Support And Resistance System

Discussion in 'For novice traders' started by Tengkorakfx, Sep 17, 2017.

  1. Tengkorakfx

    Tengkorakfx Member

    In general, support and resistance are terms used by technical analysts to describe the price level on a chart that tends to act as an obstacle to thwarting the movement of the market in a particular direction.

    Support refers to a certain price level on the chart where the currency pair is falling touching resistance from the market. This happens because the number of traders who expect the price to stabilize or raise is greater at this level - so the pair is really "supported."

    Resistance refers to a certain price level on a chart where the currency pair rises struggling to increase the value. A number of traders who think that the market will not move above this level is greater, so the level of "resist" price further increases.

    This is an important factor to note that the concept of support and resistance is a matter of human psychology. They exist because traders in the market believe they exist; and act accordingly by sell near resistance and buy near support.
     
  2. andengireng

    andengireng Member

    Support is an area of price level, where at that level DEMAND is large enough to hold down the price (DEMAND> SUPPLY). At this level, the price tends to stop moving down and will likely rise again. Practical language, support is a level expected to withstand a bearish movement (down).

    Resistance is an area of the price level at which the SUPPLY level is large enough to stop the price increase (SUPPLY> DEMAND). At this level, the price tends to stop moving up and is likely to fall again. Practical language, resistance is a level expected to withstand bullish movement (up).
     
  3. Tengkorakfx

    Tengkorakfx Member

    This is an incorrect information about support and resistance. You have to understand a definition between support & resistance and supply & demand.

    Support and Resistance is a LEVEL, means that you can put it on a specific price level. Meanwhile, Supply and Demand is an area where a price moves from a balanced area (we can call it as 'Equilibrium' area)

    You can draw Support and Resistance level with a horizontal line. While Supply and Demand area is represented with a rectangle area...
     
  4. andengireng

    andengireng Member

    Support and ressistance also called The Bounce. As the name suggests, one method of trading support and resistance levels is right after the bounce. Many retail forex traders make the error of setting their orders directly on support and resistance levels and then just waiting to for their trade to materialize.
     
  5. broforex

    broforex Member

    Support and Resistance are critical levels used by market participants in making decisions. This level is used to determine whether the price will continue or reverse. If this Support and Resistance is combined with candlestick forms, it is believed that it will be able to determine the next move.
     

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