Thread: support and resistance

Support and resistance is one of the concepts have been widely used in business. Everyone is thinking based on some where to gauge support and resistance. Support and resistance represent the relationship between supply and demand. Financial market, prices depend on the Growth and reduction of supply and demand. Supply growth means falling trend, the market expects the price will fall and sell. Demand growth means rising trend, the market expects prices to increase and buy. when supply and demand balance, the market will stability
What is support ?

Support is the price it is expected that demand is large enough to prices no reduced strong. when prices drop to levels support and more than then buyers will tend to buy more and vice versa seller will not sell. Before the price drops to support level phenomenon of demand exceeding supply appears, and this phenomenon will prevent prices falling below the support. Support is not always at a stable level and when support is falling signal supply over demand, then people tend to sell more than buy. Support level is broken to create new lower level of support, signal is sellers are losing hope, and they are willing to sell at lower prices. Addition, buyers will not buy until the price falls below support, or lower than the previous. when the support is broken, will form a new lower level support.





What are support levels based on ?

Support levels often lower than current price, will be safe if the trading near of support level or at the support level. Analytical skills are not always accurate and sometimes difficult to determine the level of support. Sometimes prices can move suddenly fall below the support. It is unreasonable to assume that the support is broken if the price fell almost 1 / 8 compared to support. For this reason, many investors have created the region support.

What is resistance ?

Resistance is the price at which it is expected that the sale is enough to keep prices not up sharply. When prices rise to levels of resistance, then the sellers tend to sell, and buyers often stop. Before prices reach the level of resistance, the supply will exceed demand, prevent price increases above the resistance. Resistance does not always stable, and the resistance was broken, signaling demand exceeds supply. Resistance level is broken to see people buying more than selling. Resistance level is broken and the new resistance level higher, that buyers were willing to buy even higher price. And sellers will not sell until prices rise above resistance or increase over the previous. When the resistance is broken will form a new resistance level higher






What are resistance levels based on ?

Resistance levels are usually higher than the current price, but usually traded near this level either at this level is safe. Sometimes the price can move above this level and suddenly increased. It is not unreasonable to assume that if resistance level is broken near the 1 / 8 compared to the resistance was set. So many traders have created the region resistance.

Method of determining the resistance and support :

High and low


Support can be set based on the previous low, and vice versa resistance can be created from the previous high.




Support = resistance

A basic analytical skills is the level of support can be converted into the resistance. When the price down below support, the level of support that may be will be the resistance, support break signals the oversupply. So if prices go back to this level, the supply can be increased.

Resistance can become support levels. When prices exceed the resistance, may appear changes in supply and demand. Resistance level was broken proved demand exceeds supply. If prices go back to this level, there will be increasing demand and and the support will be determined.