Support and resistance are two basic concepts of technical analysis. Know them and learn to identify them is very important for those who want to trade the forex market through the graphics.

During the observation of a particular graph of prices you may be faced with a rather limited range from which the negotiation occurs.These limits are designed to support (lower limit) and resistance (upper limit).

Once you define a region of support or resistance, their roles can be alternated,that is,a region of recent resistance,Once broken up can become a support area and a newly supported, once broken down,become an area of resistance.

One thing to remember is that the support and resistance levels are not exact figures.We often see a support or resistance, which seems broken, but found that the market was just testing it.

One way to help you find these support and resistance zones is to use a line chart instead of a candlestick chart.The reason is that the line graph shows only the closing price point and ignores the higher and lower price.When we draw the support and resistance levels, we do not want the reflections of the market.We Only interested in intentional movements.

Another common feature of support / resistance is that the price of a pair may have a hard time going beyond a round price like $ 1.5000.Most inexperienced users tend to buy / sell when the price is round number, because they are more likely to feel that a currency pair is better valued at such levels as well.Stop loss and profit are placed in round numbers by small operators and different numbers of large corporations who work with high values.The round number also has a great psychological strength in the market, defining many resistances and supports.

The analysis of support and resistance is used by technical traders to make trading decisions and verify when a trend is accelerating or reversing.The awareness of these important levels should affect the way you negotiate and help you improve your performance significantly.