Forex

Support and resistance are important terms 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.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.