How to draw support and resistant line in forex chart:Before starting, we should know what is support and resistant line and why we should draw that. In last article we learnt about basic charts of forex technical analysis. Our new topics knowing the support and resistance level.
Support and resistant levels are the key decision levels in forex trading where buyer and seller take some rest or time after long journey from upside to downside or downside to upside and take the decision where should they go now. Do they go side way or further go upside or downside? Buyer and seller are not different persons, if you place a buy order then you are a buyer and some times letter or now if you place again a sell order, you are a seller now. Finally, you are a forex trader.
Now, If the maximum traders take the decision to place a buy order form the support or resistance level, the market will go upside. On the other hand, if the maximum traders place sell order, the market go down. If both are equal, just market remain in the same level.
So, maximum traders consider the support and resistance level to take the decision to enter the market. That why we should also consider it as newbie. Lets go to draw it from the scratch.
There are two kinds of support and resistance levels.
i. Horizontal support and resistance level.
ii. Diagonal support and resistance level.
Horizontal support and resistance level: It is the more important than diagonal. Look at the picture below. Every swing high is the resistance level from where the market price come down and go further up from the every swing low level. Swing low level is the support level. Horizontal support or resistance level can be drawn from only one or more single swing high or swing low point.
To get the good result try to use longer time frame like H4,D1,W1,MN. If the market comes back to this level then you will find a new trading opportunity for buying order or selling order.
Live example of Horizontal support and resistance level:
Diagonal support and resistance level: Diagonal support and resistance line are drawn by joining the two or more swing low OR two or more swing high point diagonally. Here you should remember that diagonal support and resistance line always need minimum two swing low point or two swing high point. In below picture you see the diagonal support line.
Support and resistant levels are the key decision levels in forex trading where buyer and seller take some rest or time after long journey from upside to downside or downside to upside and take the decision where should they go now. Do they go side way or further go upside or downside? Buyer and seller are not different persons, if you place a buy order then you are a buyer and some times letter or now if you place again a sell order, you are a seller now. Finally, you are a forex trader.
Now, If the maximum traders take the decision to place a buy order form the support or resistance level, the market will go upside. On the other hand, if the maximum traders place sell order, the market go down. If both are equal, just market remain in the same level.
So, maximum traders consider the support and resistance level to take the decision to enter the market. That why we should also consider it as newbie. Lets go to draw it from the scratch.
There are two kinds of support and resistance levels.
i. Horizontal support and resistance level.
ii. Diagonal support and resistance level.
Horizontal support and resistance level: It is the more important than diagonal. Look at the picture below. Every swing high is the resistance level from where the market price come down and go further up from the every swing low level. Swing low level is the support level. Horizontal support or resistance level can be drawn from only one or more single swing high or swing low point.
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| How to Draw Horizontal Forex Support and Resistance Lines |
Live example of Horizontal support and resistance level:
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| Draw Horizontal Forex Support and Resistance Lines |
Diagonal support and resistance level: Diagonal support and resistance line are drawn by joining the two or more swing low OR two or more swing high point diagonally. Here you should remember that diagonal support and resistance line always need minimum two swing low point or two swing high point. In below picture you see the diagonal support line.
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| Draw Forex Diagonal Support Line |
Live example of diagonal support level: See from the below picture how the the diagonal support level is drown.
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| Forex diagonal support level |
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