Posts Tagged ‘support and resistance’

In this video, you will learn about the psychological basis of support and resistance. Beginner traders may not give importance to the psychological analysis of support and resistance. A support or resistance level being a large round number is due to the psychology perceived by traders. More often when price touches a support level, more significant it becomes. It attracts the attention of traders because it is now perceived as a double bottom chart […]

In this video, you will learn how to draw support and resistance lines on your chart and use them to trade the markets. You can use the horizontal line tool from your MetaTrader platform. As you can see on this chart, at the top, price has touched this spot two times. Now, you can use the horizontal line tool and draw your resistance level. Next, you can move downwards […]

In this video, we are going to talk about support and resistance, and the most basic but extremely effective, previous highs and lows. As you can see from this example, this is an uptrend. This is the high as indicated by the arrow. After that, there is a pullback, and the market breaks this high. This previous high now becomes support. So, you can enter long here, and hold as long as the market […]

Moving average is a technical indicator to observe support and resistance. They are a lot similar to trendlines and channels. But they help identify the direction of the trend a lot clearer. Also, they show the  strength of the trend. By adding a combination of moving averages like 50-period, 100-period, and 200-period, we can identify a long-term trend and the strength of the trend. Moving averages in addition to other indicators like MACD and RSI provide great entries in the direction of an existing […]

Trendlines are drawn using a single line. However, channels comprise of two lines which are drawn parallel, whether it is a rising, falling trend, or a trading range. Channels provide us with the upper and lower boundaries of a trading range in order to find suitable entry and exit points. Ascending channels captures the slope and price range for an uptrend. Descending channel tells us about the slope and price range of a downtrend. A flat […]

In technical analysis, trendlines are the basic tool to located support and resistance levels. There are 4 basic types of trendlines. Up or down trendlines Channels, which are comprised of two parallel lines that captures price movements, when price is rising, falling, or remains flat. Moving Averages Bollinger Bands, a variation on MAs. Trendlines are subjective. Trendlines show the view of an overall trend, either uptrend or downtrend. Without […]

Support and resistance are price levels where the market tends to stop, pause, start a new trend, or possibly reverse. Looking at this chart, you can easily identify those support and resistance levels. You can notice that those support or resistance levels formed at the highs and lows formed using the lows of day, week, or a month tend to be stronger, than from less intervals. When a support level breaks, it […]

In today's lesson we are going to focus on two very important aspects of technical analysis, called support and resistance. Let's focus on the support line first. By definition, a support line is a horizontal line that reverses the current downtrend back to upward direction. So, what we have here in this chart, is a downtrend. The actual size of the downtrend does not matter. We see a cluster of candles here and the downtrend fails […]

The idea behind support and resistance is that there are certain price levels that acts as a barrier and makes price stop and reverse. Support is a level that prevents from being pushed downwards. Resistance is a level that prevents the price from being pushed upwards. The more times the support or resistance level have been tested, the stronger it gets. It happens because the more obvious level is […]

By definition, a support line is a horizontal line that reverses the current downtrend back in an upward direction. Looking at the chart, we have this downtrend. What you can see here in this cluster of candles, the downtrend fails to continue downwards. Instead, it bounces back up in an upward direction. So, if we take a horizontal line and join the lows of these candles, this line has not been penetrated by the downtrend. […]