Support and Resistance Part 1

A support and resistance level is simply a level in a market at which traders find a price to be overvalued or undervalued depending on current market dynamics. This creates a level in the market that can act as support or resistance depending on various factors surrounding each currency.

When it comes to charting support and resistance levels, keep it tidy and focus on the levels closest to your current price action. If you start scribbling levels all over the place, your chart will look like a toddler’s doodle, and you’ll lose track of which levels to keep an eye on and which ones carry more weight.

Support Zones: Rather than a precise price point, support is usually identified as a price zone. Within this zone, numerous market participants often place their buy orders. And a resistance level is a point where it’s likely to stop rising and start falling – these are always located ABOVE the current price.