When to use the support and resistance level?
The support and resistance level are two of the basic principles of forex. If you do not know how to use them properly, you are lacking big knowledge in your career. This article will try to tell you when you should use the support and resistance levels. It is advised that they should be always used in your trades to save your investment from being lost, there are sometimes when you need to depend on these support and resistance levels. Read this article and you will know these times. If you think you are a master and you do not need this childish advice, let us tell you that learning never ends in forex. The currency industry evolves and it requires that you know what is happening in the present world.
The long-term trend
Majority of the new traders don’t really understand why they should trade with the market trend. They think forex trading is the easiest task in the world and all they need to do is to place random trades. If you think in such a way, you are not going to become a successful trader. You have to identify the long-term trend with a high level of accuracy. Use the simple trend line tools to find the market trend.
When the trends show downward movement
The most successful implementation of a support level is when the trends are going downward. If you are placing trades that can be profited when the trends are an uprising, you can easily feel the importance to know the time when the trends will rise again. If you use the support level, you can get an idea where the trend may start to rise against or where it is the last limit of your trend to go downward.
Focusing on the scheduled news
If you observe the moment of major price movement, you will notice one thing in common. Most of the time the major breakouts occurs when the price is at key levels. The expert traders in the options trading industry are well concerned about this fact. They always assess the fundamental factors as they are regarded as the most prominent price driving ingredients. If the fundamental data favors your technical analysis, you should place trades or else opt out. You need to understand the importance of scheduled news in the forex market.
If the trends are volatile
It is for both the support level and the resistance level. Volatility is your friend in forex but it is also your enemy. If you want to know when the price trends will move and if they are risky, draw a support and resistance level in your chart. The level may not be exactly followed by the trends as your drawing but they will help you to predict the future movements. Professional traders’ advice to use the resistance and support level in volatile trading to avoid misplacing of trades.
If the trends are rising up and up
What goes up must come down, it may be a law in physics but it can be applied also in the currency market. If you are watching a trend that is rising up and up and there is no indication when it will go down, take help from your resistance level. The resistance level will indicate when it will be hard for the price trend to break the level and go upward. The trend is expected to come down and you can plan your trades.
To predict the movement of the currency pairs
There are many news and information but you should always use your own analysis. Analyze the chart by using the support and resistance level to know what may be the price movement of the currency pair in the future. It will help you to plan your strategy in advance and make your plan to make a profit.
About Boris Dzhingarov
Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.
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