In this Forex trading guide we will try to describe in
detail exactly what support and resistance means in the following Forex
trading lesson. Support and resistance levels are important indicators
that can be used to set stop loss and take profit orders using technical
Support levels are the places where the price of the
currency is expected to rise. This happens when there is enough demand for
the currency in order to stop the downtrend and therefore causes it to go
In order to recognize support levels in Forex trading, take a look at the
Forex chart, and try to find a few lows that fluctuate in a horizontal
line. This line will be set as the session's support level.
If a support level is penetrated, and the currency drops below it, then it
becomes a resistance level. This is caused when the currency reaches the
support level again most traders will sell their currency and cause it to
go down again.
Forex trading Resistance levels are also horizontal lines that appear on
the upper side of the chart. Resistance levels are used to set the upper
level of Forex trading, when supply levels surpass demand for the
currency. After a resistance level is broken there is usually a change in
the bid/ask price of the currency, and sometimes leaps upwards.
Hopefully, this Forex trading guide will help you make the right decisions
in investments, and help you understand this concept of support and