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  1. Beginner
    Early Stages For Beginners
    8 Topics
  2. Forex Terminology
    11 Topics
  3. Margin & Leverage
    2 Topics
  4. Intermediate
    Identifying Scams
    2 Topics
  5. Brokers for Beginners
    5 Topics
  6. Technical Analysis
    13 Topics
  7. Advanced
    Using Indicators
    6 Topics
  8. Technical Analysis (Part 2)
    8 Topics
  9. Market Structure
    5 Topics
  10. Fundamental Analysis
    9 Topics
  11. Completion
    Risk Management for Beginners
    8 Topics
  12. Psychology for Beginners
    7 Topics
  13. Personal Psychology Questions
    2 Topics

Support and Resistance

Oftentimes you will hear traders talk about SUPPORT and RESISTANCE, which are essentially key levels.

Essentially, SUPPORT is considered the FLOOR, because price tends to bounce off that area when it reaches it. RESISTANCE will be your CEILING as you will notice price will tap the top and head back down.

Simple-Support-_-Resistance

Even though key levels can be determined by certain price points, they are never an exact number, but an area. This is why it’s important to take note of the AREA in which price bounces off of. You can always draw a thin line and box around your support and resistance when marking up your chart.

Support-_-Resitance-Areas

If price breaks a zone of your previous support or resistance, it could create a new one and remain in it. In the illustration below, you can see how support can turn resistance, and resistance can turn support.
Key things to remember when working with SUPPORT and RESISTANCE:

  • Support can turn into Resistance
  • Resistance can turn into Support
  • Not an exact price point, but an area
  • Not all Support and Resistance are respected the same
Resistance-Turned-Support