Forex Education Center And Investment- Trade With Support And Resistance,Support and Resistance is a limitation that connects the lowest point to the highest point of a trend. This strategy is usually referred to as an SR strategy which means Support Resistance. The advantages of using SR strategy is able to provide guidance to traders regarding the highest and lowest area on the graph. He can also explain whether the market will continue the trend or bounce (bounce), a reversal of the previous trend.
Therefore, the Forex Education Center And Investment article will discuss about the support and resistance, as well as benefits to trading.
S and R And Trading Plan
Support and Resistance is one of the techniques most widely followed technical analysis in financial markets. It is a simple method to analyze the charts quickly. It can be seen from the 3-point in trading using SR strategies, including:
1 When driving directions trend occurred
2 When time entry begins
3 When to get out of the trading
If you can answer the 3 items above, then you essentially have a trading plan. Identify the Support and Resistance in the table below can answer the questions above.
Support
As you can see in the chart above, support is oversold point under. While Resistance is overbought point located at the top of the price because it was considered expensive.
Think of it this way, you see a room and see the Support as the floor while Resistance is the ceiling. Support and Resistance From this, the price will reach the breakout price is referred to as a trend. The penetration itself is done with one-way. If the price penetrates the Resistance, it means the trend will move toward buy. Conversely, if the price moves to penetrate Support the trend will be down-trend.
In theory, Support is a price level where demand (purchasing power) is strong enough to prevent the price down past the lowest price at the time. The reason is if the price is getting close to the support, it is regarded as a less expensive price. Buyers can see the price is too cheap, and agreed to start making a purchase. Sellers ultimately less confident because the sale price was too low and it does not fit because of the price offered by the buyer at a very low price. In such cases, the request or the buyer will try to maintain the price to go up so that the price does not penetrate Support.
Resistance
Resistance is the price level at which supply (selling power) is strong enough to prevent the price from rising further. The reason behind this is when the price is getting closer and closer to the Resistance, the price is more expensive to make so that sellers tend to sell. While buyers become less or a little to take action to buy. In that scenario, supply (sellers) will overcome demand (buyers), this then prevents the price of a breakout above resistance.
As a general rule, the longer the period of time from the graph, the more accurate level of support and its Resistance. In other words, the level of support and resistance are reflected on the graph D1 will be stronger than it appears on the H1 chart.
