Support and Resistance Tutorial

GPS Forex Robot 3 Review I start with these concepts because they need to be understood in order to use the day trading levels that I post each day. The following topics involve looking a chart of price history of a given financial instrument. Support Levels are price points at which prices have had a hard time pushing down through in the past. In other words, a support level is a level where price stopped falling. Often a support can be found at slightly different levels, for example yesterday prices moved down to $90 in the morning, later in the day they went down to 89.90 before moving higher, then near the end of the day price touches 89.95 and then moves back up to close at 91.

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In this example three support levels were created, but together they can be used to describe a support area. Support areas have more significance than a single level because it shows the market has tried several times to breakthrough a certain level, but could not sustain it. In this case the support area would be 89.90-90.00. Resistance Levels on the other hand are price point in which prices have had a hard time pushing up through in the past. In other words, a resistance level is where prices stopped rising. Just as the example under the support levels section, resistance can also form resistance areas. Resistance and support levels are dynamic, meaning prices may just edge past the old support resistance level only to revert course. This new price is a new resistance or support level, but should be coupled with old support and resistance levels in the same are to create a support or resistance area.