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Support and Resistance is one of the most important chapters in the field of trading. This indicator is one of the most powerful tools used by traders to identify the possible trends and reversals of the security price that tends to act as barriers, preventing the price of an asset from getting pushed in a certain direction. In this article, I will share everything about Support and Resistance and how you can use Support and Resistance on Pocket Option.
- Support and Resistance is a trading concept which suggests that the price oscillates around these two levels.
- These two levels act as the barrier for the price as when the price touches the two levels they are most probably going to bounce back in an equivalent direction.
- Support is the price level that acts as a barrier for the sellers when the price touches the support level the price usually bounces back up.
- Vice versa, Resistance is the price level that acts as a barrier for the buyers when the price touches the support level the price bounces back down.
What is Support and Resistance?
Support is the price level that acts as a barrier to the downtrend. It prevents the price from going down constantly. This is the price level where the downtrend of the price is expected to pause because the buyers are trying hard to push the price up.
It is expected when the price touches the support level the price will bounce back up. However, If the price breaks the support level due to market fluctuations. It is likely to continue falling until the next support level.
Resistance is just the opposite of the Support level. It is the price level that acts as a barrier to the uptrend. It prevents the price from going up constantly.
Again, It is expected when the price touch the resistance level the price will bounce back down. However, If the price breaks the Resistance level due to market fluctuations. It is likely to continue falling until the next Resistance level.
Drawing Support and Resistance levels on Pocket Option
The best way to learn How to draw Support and Resistance level is by practising the same on the trading platform. Here, I will use the Pocket Option to illustrate the concept. You can also start practising the same by Opening the Pocket Option practice account.
Once you have signed up you first need to click on the drawing icon and select the horizontal line from the menu.
Now, connect the two highs for the resistance level and similarly, connect two lows for the support level. You can easily change colour from the options below the line.
Trading with Support and Resistance Lines on Pocket Option
Drawing and trading with Support and Resistance lines on Pocket Option is really simple and easy. According to the experts, Support and Resistance levels are even more stronger if you trade in a long time frame chart
While trading with support and resistance you just need to remember that If the price is near the resistance level you need to take a sell trade similarly, If the price is near the support level you need to take a buy trade.
As you can see above when the price is near the support level indicated with yellow arrows are the buy trades signals and similarly, when the price is near the resistance level indicated with green arrows are the sell trade signals.
Important Points you need to remember
When you look at the chart above you will notice that the support and resistance level are pretty strong. That’s why this is a reliable method and the odds of breaking these level is pretty low. These levels become even more stronger If you trade in the high time frame chart and the best time to place the trade is when the price is touching the support/resistance level. You can easily place multiple trades using the same and make some big bucks.
To summarize, Support and Resistance is one of the most important chapters in the field of trading and the skill of drawing and trading properly is really important. I will highly recommend you start practising the art of drawing and trading with support and resistance level in the Pocket Option practice account and once you are confident enough about your skills you can then move to the real account. If you still have any doubts do comment below.
We wish you the very best of luck!!