This is one of the first basic we learn. Support and resistance, they are very simple, yet very useful on our daily trading life. Some people do not refer to them, and some people think they are important. I will now explain more below
Support is a place where a downtrend stops moving, and retrace. Resistance is where an uptrend stops and retrace. Look at the chart I capture below. The red circle is support, while the green circle marks the resistance.
Support and resistance appear in all timeframe. Usually the one on bigger timeframe are more significant. Often support or resistance will get re-tested. The more time the level being touch, the stronger that level is as support / resistance.
Often support may become resistance, once they are broken. Same goes with resistance, they may become support once it’s broken. On the chart I draft below, I have indicated a blue line. Notice that once the support is being broken, it will turn out to be resistance later on.
Often neglected, support and resistance is once of the most useful tools in a traders toolbox. Properly draw your support and resistance and you may avoid few high risk trades.
(p.s. The illustration above are not accurate, as I grab it from live chart from my MT4)
