5 Tips for Drawing Support & Resistance Level
• The price level should be tested at least twice to prove that it is an important price level.
• A quick run away from any price is an important price level as it indicates a higher pressure of either demand or supply.
• The latest price level has more effect than the older one.
• The higher, the number of times price tests; it becomes weaker, because if the market price returns again and again, the pending orders and demand will get fulfilled, as, so there is a possibility of price breaking the price level.
• The price level is valid until it is broken i.e. once the price penetrates deeply; it is no longer an important price level.
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A Couple of Interesting Facts (Secrets) about Support and Resistance Price Levels
• If price breaks an important support level, then it potentially becomes an important resistance level and vice versa.
• The speed and strength of breaking any price level is an important factor, which determines the speed and strength of the future move.
• The longer the price is supported or resisted at a price level, the stronger could be the future move after breaking that price level.
As now you know how to find a support and resistance zone, start finding them in your demo account, and try to understand as how price reacts as these levels? The more you’ll practice, the more you’ll master the art of finding key support and resistance levels.
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