How To Draw Support and Resistance Zones
How To Draw #Support and #Resistance Zones
Today we’re going to cover one of the most important and often incorrectly taught/practiced concept of #technicalanalysis, the infamous #support, and #resistance zones. Notice how I used the word zones instead of lines? I’ll get into why later, but I assume you’re already questioning your current knowledge on this fundamental topic just from that sentence alone. In this post, I will go into detail about what these zones mean and how to properly draw them on your charts.
What do these zones represent?
#Support/#Demand: In layman terms, it is a region of price where a #currencypair cannot/fails to go any lower on repeated occasions. In other words, regions of price where there is a demand for buyers (buyers are more likely to enter contracts at this region.)
#Resistance/#Supply: Conversely, it is a region of price where a #currencypair cannot/fails to go higher. In other words, regions of price where there is a supply of sellers (sellers are more likely to sell off their contracts in this region.)
I hope that makes intuitive sense. Moving on…
How do I chart these zones?
Every trader has their own method, but for me personally, I like to do a top-down approach to my analysis. For plotting my support and resistance zones, I start on the monthly time frame, then work my way done all the way to the hourly. I look at regions where price has repeatedly failed to push up/below or regions where we had unusually long wicks pierce through. When I move on to the smaller time frames (say the 4hr/1hr) I use lines for sake of visibility.
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Today we’re going to cover one of the most important and often incorrectly taught/practiced concept of #technicalanalysis, the infamous #support, and #resistance zones. Notice how I used the word zones instead of lines? I’ll get into why later, but I assume you’re already questioning your current knowledge on this fundamental topic just from that sentence alone. In this post, I will go into detail about what these zones mean and how to properly draw them on your charts.
What do these zones represent?
#Support/#Demand: In layman terms, it is a region of price where a #currencypair cannot/fails to go any lower on repeated occasions. In other words, regions of price where there is a demand for buyers (buyers are more likely to enter contracts at this region.)
#Resistance/#Supply: Conversely, it is a region of price where a #currencypair cannot/fails to go higher. In other words, regions of price where there is a supply of sellers (sellers are more likely to sell off their contracts in this region.)
I hope that makes intuitive sense. Moving on…
How do I chart these zones?
Every trader has their own method, but for me personally, I like to do a top-down approach to my analysis. For plotting my support and resistance zones, I start on the monthly time frame, then work my way done all the way to the hourly. I look at regions where price has repeatedly failed to push up/below or regions where we had unusually long wicks pierce through. When I move on to the smaller time frames (say the 4hr/1hr) I use lines for sake of visibility.
Our Website: https://www.forexlens.com
Forex Lens - Your Eye into the Forex Markets
Be sure to sign up for user-testing for our Trading Room 2.0 by emailing [email protected] with the subject line "Trading Room Waitlist"
Join our Telegram channels below:
Company Telegram: https://t.me/ForexLensInc
Free Forex Signals Channel: https://t.me/ForexLensAnalysis
Testimonial - See what members say about us: https://youtu.be/teqK1MQ5X7I
CONNECT WITH US ONLINE:
Get the Latest News on Telegram: https://t.me/ForexLensInc
Follow Forex Lens on TradingView: https://tradingview.com/u/forexlens
Follow Forex Lens on Facebook: https://facebook.com/forexlens
Follow Forex Lens on Twitter: https://twitter.com/forexlens
Follow Forex Lens on Instagram: https://instagram.com/theforexlens
Follow Forex Lens on LinkedIn: https://linkedin.com/company/forexlens
Great traders trade here, and who you trade with matters!
https://forexlens.com
