Support and Resistance Technical Analysis and Support and Resistance Forex Trading Signals
Support and Resistance is one of the widely used concepts in Forex trading. Most traders plot horizontal lines to show these levels.
There is also an indicator used to plot these levels automatically and indicate the resistance and support levels.
When it comes to these levels price can either bounce off these levels or break these levels.
If a resistance level is broken price will move higher and the resistance level will turn to a support.
If a support level is broken price will move lower and the this level will turn to a resistance.
Price where the majority of investors believe that prices will move higher, while resistance levels indicate the price at which a majority of investors feel prices will move lower.
Once price has broken through a support or a resistance then it is likely that the price will continue moving in that particular direction until it gets to the next support or resistance level.
The more often a support or resistance level is tested or is touched by the price and bounces, the more major that particular level becomes.
Technical Analysis and Generating Signals
These levels are calculated a trend lines method.
In an upward trend the resistance and support will generally head upwards
In a downward trend the resistance and support will generally head downwards