Updated: Sep 23, 2018
Regardless of you're trading strategy or style, support and resistance levels form the road to success.
Although the topic of support and resistance may be the most common concept in forex trading, many traders struggle with drawing the correct levels.
Support and resistance relates back to the topic of supply & demand, to put this simply, the support level could be explained as an item which buyers see as a discounted item with the hope that its value would increase. While the resistance level could be comparable to an item which has reached its potential and thus it may be time to offload as this may be the highest price they would receive for such item.
Moving on from the psychology behind this, lets take a look at a physical example..
Although these levels are generally respected, they will have to move on to different levels when the cycle is up. We'll leave the topic of breakouts for a later post.