SUPPORT & RESISTANCE Hey Everyone,
Support and resistance is one the most talked about price action component when it comes to technical chart analysis.
What is support and resistance?
Support and resistance are areas where price fails to continue to rise or drop. Historical areas of rejections create levels of support and resistance. These levels are expected to stop price from a continuation. - SEE EXAMPLE BELOW
How can we use support and resistance?
Support and resistance levels can be used to take trades from and to close trades on. We will cover the basics of drawing the levels and also identifying rejections and breakouts using support and resistance levels.
First and foremost traders draw support and resistance in many different ways. We will cover one of the methods we use to support our signals and trades, which is called "CANDLE BODY CLOSE"
See examples below on how to draw the levels, identify rejections and also the breakout strategy.
CANDLE BODY CLOSE SUPPORT AND RESISTANCE
Failure to close above a level with the candle body forms level of resistance and failure to close below a level with the candle body forms support. Also areas of rejections.
CANDLE BODY CLOSE BREAKOUT
A candle that is able to close above a resistance or below a support level with the body and not just the wick confirms a breakout of the level for a continuation.
This is a fantastic simple way to chart support and resistance levels, that can also be used to support entries and exits by identifying the wick rejections and the candle body breakouts.
As always, we will continue to share our chart ideas and useful educational tips for traders. Please don't forget to like, comment and follow to support us, we really appreciate it!
GoldViewFX
XAUUSD TOP AUTHOR
