Support and Resistance are key players in Forex trading. Identifying support and resistance would be our first step towards our Technical analysis. There are different ways a support and resistance line could be placed. Each trader may differ in their own analysis but the basic concept is the same.
Support Lines:
Support lines are horizontal lines drawn in a chart where the market has been at its lowest. It is believed that if the market again reaches the support line, a reversal in trend would happen.
There are times when the market has broken the support lines. We must be careful at these times as they might mislead sometimes. If a support line is broken for sure, then the trend will continue the same way.
Resistance Lines:
Resistance lines are horizontal lines drawn in a chart where the market has been at its highest. It is believed that if the market again reaches the resistance line, a reversal in trend would happen.
Similarly, resistance lines could be broken and if they are then the trend will continue.
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