Visit our site http://www.theforexguy.com/how-to-draw-support-and-resistance/ for more information on Forex Support And Resistance. Forex support and resistance levels beat lagging indicators every single time - if you know how to use them. The problem is that many beginners don't apply them properly. Understanding and identifying support and resistance levels properly is absolutely critical to making money in the foreign exchange. support and resistance levels are there to provide a template to the market - something that you can lay over the market's movements and make sense of all its ups and downs.
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Support, resistance & swing levels will change as the market changes. By marking only the levels the market is respecting at the present time keeps you in tune with market dynamics and make it a much easier task to make clear, logical trading decisions.
Support and resistance levels are proven price areas where buyers and sellers find some form of equilibrium and generally a shift of power between buyers and sellers occur that creates the ‘price reversal’. Therefore Support and Resistance are the key turning points in the market. Price doesn’t move in straight lines as you are no doubt well aware of. Price swings up and down, creating new swing lows, swing highs or re-tests existing ones.
Mark upper resistance and lower support in range bound markets
When price breaks a support or resistance level mark it on your chart and wait for a signal to confirm it as a new swing level
During trending conditions mark higher highs and lower lows and wait for them to be confirmed as a swing level with a price action signal or price bounce.
Mark the support and resistance levels on your chart that are prominent on the weekly and monthly chart, only around the area where current price is located.
Remember the higher the timeframe you mark your levels from the higher the significance which gives trades that form off the higher significant levels a higher chance of success.
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Support And Resistance