The resistance and support lines which be clarified through which the movements and fluctuations in the price of power between the forces of the purchase, which is also called the oxen and the sales force.
* According to the support price levels, most traders have integrated faith that prices will take the course of a bullish trend. When falling prices and its extension to the level of support points and the arrival of the currency to the lower price, then traders Buyers will have a greater tendency to buy while others will decrease the desire of traders which sellers for sale.
* According to the resistance to price levels, most traders have a firm conviction that prices will take the course of a bearish trend. When prices rise and its extension to the level of resistance points and the arrival of the currency to a higher price, then traders sellers will have a greater tendency to sell while buyers will decrease the desire of traders in the purchase.
We’ll show you The following is a chart of the currency pair euro / yen and in which the resistance and support levels appear:
Prices are likely to continue their while reached prices driven within the safe area between linear denominated and support the region. When you break one of the two lines and breached this breakthrough it is a sign of the two:
- there is a growing trend.
- reversal of the trend.
When the breach of resistance points to the top, there will be a change in the type of this level to turn into a support level, and the same thing is when you break through the support level points down as change these points to turn into resistance levels.
We’ll show you The following is a chart of the increase in the price of the currency pair AUD / yen, which see through it to break through the key resistance points and change to the level of support points.
Investors take trading decisions based on the use of the analysis of the resistance and support levels and see a time when price trends will increase or decrease. The use of this important and useful levels directly affects the way your trading system, which gives support and Settle dawn to take trading decisions and thus improve your performance deliberative best picture.