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Forex Bond
Support and Resistance (S/R) is one of the base ideas in trading. All seasoned traders understand and use this very basic concept. In this report I'm going to tell you what S/R is and how to find it as well as a few ways to draw S/R lines and the basic way of trading S/R.
What is keep and Resistance-
S/R is a view that the shop will taste opposition to one degree or someone else in a determined area. That means that the shop will tend to struggle at areas of S/R and often times bounce.
What Is FOREX
Swing Points-
Swing Points are the first thing that you need to know about when seeing for areas of S/R. Swing Points are a large convert in direction. They are peaks or valleys in price action, Peaks being swing highs and Valleys being swing lows. Only one candle up and one candle down is not a swing point, at least not on that time frame. Swings are commonly characterized by a series of candles trending in one direction and then changing and going the other way. Recognizing swing points are the first step in seeing areas of S/R.
Support Vs Resistance-
Support is the idea that the shop is held up by an imaginary force. If the shop is trading above an area of S/R, that area is called support. The opposite is also true if the shop is trading below an area of S/R, that area is called resistance. In general, there is no usable discrepancy in the two, so I do not make a big deal about distinguishing the difference.
Drawing Levels of S/R-
The best and most tasteless way of visualizing or drawing these levels of S/R is to look for swing points. Once you find swing points you should then look to draw the line as close to the bodies of candles at the top or lowest of the swing. There is a best fit idea to work with here, try not to cut through bodies of candles. Also, once these levels have been broken they will lose value or respect from the market, so keep your S/R lines up to date.
The drive of S/R levels-
There are two main ways to see the drive of an area of S/R. The first way is to look at the size of the swing point that made the level. The second way is to look for multiple swings off of the same level.
Trading with S/R lines-
Looking for the escape is one of the best ways to use S/R to trade. The escape comes when a candle crosses and closes on the other side of a level of S/R. Most traders use the view of the close of the candle as a conformation or a commitment that the shop has broken a keep or resistance level and then will continue in the direction of the breakout. Some population will trade the bounce, assuming that the level will hold.
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