Forex

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Hello…folks in this article I am going to cover one of the most important chapters in the trader’s life i.e Support and Resistance.

No doubt Support and Resistance is one of the powerful and Important chapters that every trader must know.

 

What is Support?

As the word suggests, Support or dependence is a line that provides a protective layer to the price as it tends to falls.

The main work of support is to act as a parent of the price as it tends to fall and helps the buyers to bounce the price back up.

If the price of the commodity is dominated by sellers. It is preassumed that sellers won’t be able to dominate any longer after the support level.

However, If the price because of market fluctuations breaks the support level then it is preassumed that the sellers will dominate the price until the next support level.

 

What is Resistance?

Resistance is just the opposite of Support, Resistance is a line that acts as a ceiling layer to the price as it tends to rise.

The main work of resistance is to act as the ceiling of the price as it tends to rise and helps the sellers to bounce the price back down.

If the price of the commodity is dominated by buyers. It is preassumed that buyers won’t be able to dominate any longer after the resistance level.

However, In case if the price due to market fluctuations breaks the resistance level then it is preassumed that the buyers will dominate the price until the next resistance level.

 

How to draw Support and Resistance lines?

How to find Support and Resistance lines? and How to draw Support and Resistance lines? Well, it’s damn easy.

To illustrate the Support and resistance lines I am going to use Binomo. If you don’t have Binomo account click here.

Once you click the link above you will land on the Binomo Homepage.

Now, click on Give it a try and Enter your email, password & more.

 

Once you have signed up you will land on the Binomo dashboard.

 

 

Now, Click on the chart button and select a candle from the menu.

 

Your dashboard will look something like given below.

Now, click on the drawing tool and select the Horizontal line from the same. and place them properly.

How to find Support and Resistance in day trading?

Now, what you need to do is find two highs at the same level for resistance which will act as a ceiling.

Similarly, Find two lows for a Support level.

 

Once you are done click on stop drawing.

 

Example:

 

See, The chart above we can clearly see that there are two easy-to-spot support levels plus one resistance level.

How to trade with Support and Resistance?

Trading with Support and Resistance is very easy.

The golden rule of Support and Resistance says:

If the candle is near the support level then it is preassumed that that will bounce back up in the support of the buyers.

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Similarly, If the candle is near the resistance level then it is preassumed that that will bounce back down in the support of the sellers.

Let’s check some examples:

Given above is a 1-hour chart and we can see clearly see that the candle is near the support level so here, we go for a buy trade.

Similarly, given above we can see that the candle is near the resistance level. So, here we should go for the sell trade.

Check Your Knowledge:

Comment below how many Support levels with resistance can you spot? Comment your answers below or mail us at Honestdigitalreview@gmail.com.

Winding Up

So, Trading with Support & Resistance is so easy.

You just need to remember How to find Support & Resistance? & How Support & Resistance works?

If the candle is near the support level then it is preassumed that that will bounce back up in the support of the buyers.

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Similarly, If the candle is near the resistance level then it is preassumed that that will bounce back down in the support of the sellers.