The idea behind support and the resistance are without any doubt regarded as two most discussed attributes of the technical analysis and most of the time regarded as a difficult subject by people who are still now learning art of binary trading. Most of the binary option strategy is based over S&R factor, therefore regarded as a base of any type of trading strategy. These types of lines are considered as horizontal which shows cost has earlier struggled to break.
Also, this will show that the cost has shifted within a certain range. Cost hits the resistance in the uptrend and also meets support in the downtrend. The level of resistance avoids cost from making certain highs as the support level is known for making new type of lows. These types of levels might only just hold few of the re tests before breaks.
Demand and Supply
Stocks, market prices and currencies are most of the time driven by large amount of demand and supply. Supply can be closely linked with bears, selling and bearish.
Demand can be easily linked with buying, bullish and bulls. Both can be noted as the opposites. When the demand rises, costs increases and when the supply rises, the prices starts to fall.
Method of Applying Resistance and Support
A thumb rule is to have two different lines on the chart at a given point of time, shifting them accordingly as the cost moves through lines. Resistance and support would not match up hundred percent with lines that you drew and therefore should be seen as a zone or an area.
You need to search for Put deals when the cost displays the rejection of the resistance levels and search for the call trades when cost rejects the support levels. Always one should wait for the confirmation of the bullish and bearish candlestick set up before making an entry to the world of trades. Confluence is a game which makes trade a high possibly winner. Instead, No Touch choices can be utilized when these types of levels can be reached.
You should be patient while performing this simple and effective strategy of trading. One should not do trading more than two times in a single row as the price of the market tends to shift beyond these types of levels following the third number re-test. The strategy of support and resistance is best utilized in the ranging market, permitting one to earn benefits from the cost movements.
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