Support and resistance is an integral part of forex trading, which by knowing the point of support and resistance of a trader can see clearly the movement of the price will be able to move to what extent. Resistance is the upper limit of a price movement and Support is the lower bound of a price movement.
From the support point of resistance also we can find out whether a price is going a retracement or even have formed a reversal and form a new trend.
HOW TO DETERMINE SUPPORT RESISTANCE
There are several ways commonly used by traders in determining support and resistance
The highest and lowest points in a timeframe
This is the easiest and most classic way of determining a support and resistance, by simply dragging the horizontal line manually based on the highest and lowest price point of a trend.
Although this is a classic way, but this way that still remains the mainstay of seasoned traders in determining the support and resistance
How to make :
The first thing you should know from this way is to know the highest and lowest point of a chart. The period chosen to make support and resistance is not too long so the range is not too big, but also not too short because it will confuse when to take a position.
Example:
GBP / USD at 1 hour high time frame is at the level of 1.25564 and its low is at the level of 1.24029. So in this 1 hour time frame pair GBP / USD has support at 1.25564 and resistance at 1.24029.
For more details we can see in the picture below
At the time this article was created, GBP / USD is at the level of 1.22431 and as seen in the picture there is some history of the highest and lowest prices that can be used as a benchmark. At this point can be drawn lines that become titk Support and Resistance
Using SMA (Simple Moving Average) with big period
The moving average indicator is a fairly common indicator used by traders to predict the trend of a price movement. But do you know that moving averages in large periods can be used as support and resistance?
And the difference with the first way above, this way is dynamic aka follow the price that keeps moving. The trick is to use SMA period 100
From the picture is quite visible when the price broke through the line MA 100 then that happens is a significant trend change. The line is only one course, when the price is above the SMA then the SMA will be support and when the price below SMA then the line will become resistance.
Fibonacce Retracement
Many technical analyzes are using Fibonacci retracement as one of the technical analysis. There are many Fibonacci variants, but this time we will only discuss one of them is Fibonacci Retracement.
Look at the picture below
From the picture above information we get data S1 to R4 level data that can be used as a support resistance in trading.
Pivot Points
This method is the last method you can use in determining the support resistance, which in determining it is quite complicated because it uses formula formula which in the end can be used as a determinant in determining the support resistance number. This formula is commonly called the Pivot Points
How to calculate:
Pivot point consists of 5 levels
R2 - Second resistance
R1 - Resistance first
PP - Pivot Point
S1 - First Support
S2 - Second Support
It takes also the highest and lowest price data in one day
Open 1.24849
High 1.24951
Low 1.24190
Close 1.24386
PP = (O + H + L + C) / 4
PP = (1.24849 + 1.24951 + 1.24190 + 1.24386) / 4
PP = 1.24594
Support 1 = (2xPivot Points) -High = (2 × 1.24594) - 1.24951 = 1.24237
Support 2 = Pivot - (High - Low) = 1.24594 - (1.24951 - 1.24190) = 1.23833
Resistance 1 = (2 x Pivot) - Low = (2 x 1.24594) - 1.24190 = 1.24998
Resistance 2 = Pivot + (High - Low) = 1.24594+ (1.24951 - 1.24190) = 1.25355
Now you must know about 4 ways that can be used to determine the titip support and resistance, which perlua you do now is to try one by one and see which one best suits your current trading style.
It could be between one trader with another trader there is an inequality as to which method is most suitable, but by trying you can determine for yourself which one best suits you.
From the support point of resistance also we can find out whether a price is going a retracement or even have formed a reversal and form a new trend.
HOW TO DETERMINE SUPPORT RESISTANCE
There are several ways commonly used by traders in determining support and resistance
The highest and lowest points in a timeframe
This is the easiest and most classic way of determining a support and resistance, by simply dragging the horizontal line manually based on the highest and lowest price point of a trend.
Although this is a classic way, but this way that still remains the mainstay of seasoned traders in determining the support and resistance
How to make :
The first thing you should know from this way is to know the highest and lowest point of a chart. The period chosen to make support and resistance is not too long so the range is not too big, but also not too short because it will confuse when to take a position.
Example:
GBP / USD at 1 hour high time frame is at the level of 1.25564 and its low is at the level of 1.24029. So in this 1 hour time frame pair GBP / USD has support at 1.25564 and resistance at 1.24029.
For more details we can see in the picture below
At the time this article was created, GBP / USD is at the level of 1.22431 and as seen in the picture there is some history of the highest and lowest prices that can be used as a benchmark. At this point can be drawn lines that become titk Support and Resistance
Using SMA (Simple Moving Average) with big period
The moving average indicator is a fairly common indicator used by traders to predict the trend of a price movement. But do you know that moving averages in large periods can be used as support and resistance?
And the difference with the first way above, this way is dynamic aka follow the price that keeps moving. The trick is to use SMA period 100
From the picture is quite visible when the price broke through the line MA 100 then that happens is a significant trend change. The line is only one course, when the price is above the SMA then the SMA will be support and when the price below SMA then the line will become resistance.
Fibonacce Retracement
Many technical analyzes are using Fibonacci retracement as one of the technical analysis. There are many Fibonacci variants, but this time we will only discuss one of them is Fibonacci Retracement.
Look at the picture below
From the picture above information we get data S1 to R4 level data that can be used as a support resistance in trading.
Pivot Points
This method is the last method you can use in determining the support resistance, which in determining it is quite complicated because it uses formula formula which in the end can be used as a determinant in determining the support resistance number. This formula is commonly called the Pivot Points
How to calculate:
Pivot point consists of 5 levels
R2 - Second resistance
R1 - Resistance first
PP - Pivot Point
S1 - First Support
S2 - Second Support
It takes also the highest and lowest price data in one day
Open 1.24849
High 1.24951
Low 1.24190
Close 1.24386
PP = (O + H + L + C) / 4
PP = (1.24849 + 1.24951 + 1.24190 + 1.24386) / 4
PP = 1.24594
Support 1 = (2xPivot Points) -High = (2 × 1.24594) - 1.24951 = 1.24237
Support 2 = Pivot - (High - Low) = 1.24594 - (1.24951 - 1.24190) = 1.23833
Resistance 1 = (2 x Pivot) - Low = (2 x 1.24594) - 1.24190 = 1.24998
Resistance 2 = Pivot + (High - Low) = 1.24594+ (1.24951 - 1.24190) = 1.25355
Now you must know about 4 ways that can be used to determine the titip support and resistance, which perlua you do now is to try one by one and see which one best suits your current trading style.
It could be between one trader with another trader there is an inequality as to which method is most suitable, but by trying you can determine for yourself which one best suits you.
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