Learning what it means to determine support resistance levels is key to understand. They will play a major role in learning when and where to place your orders, when to get out of a trade, and where you might want to place your stops. Think of support as the “floor” and resistance as the “ceiling.”
It’s important to understand that these support and resistance levels are there for a reason. It simply means that the price reached a point that it could not, or had difficulty, going through. This is why people refer to it as “resistance” when the price could not go above this point, and “support” when the price could not go below this point.
For now, just understand that prices are like a rubber ball and they will tend to bounce between these support and resistance levels until they break through. Now, let’s look at some support and resistance levels on the following chart. Remember, support is the floor, and resistance is the ceiling.
Notice the Support and Resistance Points
In this lesson, you’re going to learn when to place some trades and where to place them. You will learn how to read these charts and to understand some technical formations that take place, as well as how to take advantage of them. Soon, you’re going to learn to use these support and resistance levels in placing your orders and your stops. For now, I just want you to be able to see them and label them.
On the following chart, take a ruler and a pen and draw the support and resistance levels yourself, just like I did on the previous chart. It may seem like a simple exercise, and it is; but it’s important to learn how to do it.
Determine Support Resistance Levels Practice
Keeping practicing to improve your ability to determine support resistance levels when they appear and don't forget to leave a comment below! I'm always looking to see your progress.
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