This video explains in detail how to draw your support and resistant lines in any given chart.
To those who don’t know what support and resistant lines means in charting. They’re simply historical levels drawn on a chart to determine what’s most likely to happen next, in the price movement of a trading pair or market.
I want you to see the support and resistant line in a chart like the floor and ceiling of your room.
If you bounce a ball on the floor of your room, it will most likely bounce back and hit your ceiling, then retrace back to the floor.
It will continue in this motion untill the momentum carrying the ball wanes away and it stops. Thesame is applicable with the movement of price in any given chart.
Below is an image of a chart showing your support and resistant lines.
The strength in using historical levels (support and resistant) in our chart analysis is based on the fact that:
History tends to repeat itself.
If prices had increased more than 3 times when it hits a particular support line. It’s most likely to increase this time around.
The same with the resistant line. If prices had dropped more than 3 times when it hits a particular resistant line. It’s most likely to decrease this time around.
I hope you’re having a bigger picture of what support and resistant his when trading.
Click here to watch the full video: https://youtu.be/EUbtZs4MWFs