Guidelines for support and resistance
Overload resistance Overload resistance occurs when the sales pressure exceeds the purchase demand and the price decreases, at least for a while.
Support The underlying support occurs when the purchase demand exceeds the sales pressure, putting a temporary floor under the stock
The support areas can act as resistance and the areas of resistance can act as support.
Horizontal consolidation regions A horizontal consolidation region is an area of horizontal price movement that has a large amount of price overlap with a flat bottom, a flat top, or both. When the price hits against it, the currency pairs often reverse the direction or get stuck. Long, tight HCRs (a lot of price overlap) work better than short or loose HCRs (snaking prices).
Do not place orders to buy and sell trading signals, or place stop loss orders in numbers that end in zero. That's where everyone else will place their business orders, perhaps causing unusual price movements
Use the next closest number (a number that ends with a zero) to guess where the price will stall or reverse the price, even if the forex has never risen so high
Objects that show support will often show resistance in the future and vice versa.
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