Support and Resistance is one of the commonly used strategies in the World of Forex trading. The Forex Support and Resistance (forex แนว รับ แนว ต้าน, which is the term in Thai) strategy uses charts and uses horizontal lines to divide the “level.” The Horizontal lines act as support and resistance lines that you can use for deciding to buy or short, depending on the signal charts provides. So, this article provides the information that many beginners are looking for regarding S&R levels.
What do you mean by support and resistance levels?
Forex Support and resistance strategy is a graphical analysis of the chart. For making lines on the exact points, you need to see it from a historical point where the price has bounced back or fallen significantly.
How To Draw Support And Resistance Levels
Drawing a support and resistance level is easy. However, you should first master the strategy to figure out the exact points to draw the line. You have to look at the price accumulating over the one place on the chart. The cluster created where the lines start to grow flat creates support or resistance level.
Though we use the term levels in the S&R levels acts more like a range that price cannot break. However, you need to be precise with the use of strategy. One thing that you can do is to draw the lines with as many touches as possible.
How Find Strong S&R Level to trade Forex?
Assessing the Forex support and resistance level correctly during the trading leads to colossal profit. Therefore you need to be perfect with the use of strategy. Here is how you can use the strategy and adequately assess the charts:
Parameters You Can Use For Drawing S&R Lines
1. Time Frame
The longer a Price takes to break the support level or resistance, the better the support or resistance level work. You can use the S&R chart on the daily, weekly, and monthly timeframes.
2. Number Of Touches
The line you create needs to have maximum touches, and if it does, you can consider it as a substantial level. The strong levels have the following features when you look at the last historical trend on the chart:
- Price Touches The Level Many Times While Trying To Overcome The Level.
- The Price Tries To Break The Level Number Of Time But Fails.
- The Horizontal Lines See The Maximum Number Of Bounce Backs.
3. Time To Get Formed
The longer time it takes the price to form a Forex Support or resistance level pattern, the stronger and more significant the level becomes.