Hello… How are you?
Today in this article, I am going to discuss the backbone of technical analysis i.e. Support and Resistance.
In this article, I will cover everything about Support and Resistance and I will also cover the most-asked questions regarding Support and Resistance such as What is Support and Resistance, How to draw Support and Resistance, How to find Support and Resistance in Day Trading, Is Support and Resistance the same as supply and demand.
What is Support and Resistance?
Support and Resistance is the most important trading tool that helps traders identify the crucial price movements of a security.
The concept of Support and Resistance are completely opposite to each other where the Support level is the price level which stops the price from falling down any further. Support level is the price level where the trader often expects an increase in buyer force. Similarly, The Resistance level is the price level which stops the price from rising up any further Resistance is the price level where the trader expects an increase in seller force.
How to Find Support and Resistance Levels in Pocket Option
Identifying Support and Resistance can seriously impact your trading skills and can also result in an increase in your trading profit. Given below are the steps of How to Find Support and Resistance Levels in the Pocket Option trading platform
1> Pocket Option Registration: First you need to have access to your Pocket Option account. In case you don’t have one click here. Once you click the link you will land on the Pocket Option home page next enter your email address, password and click complete registration.
2> Set your default chart: Once you have signed up you will next land on the Pocket Option trading dashboard Now, click on the chart button at the top of the page and select candlestick from the menu.
3> Find tops and bottoms: Next, find the top and the bottom of the candlestick. Firstly, find the two bottoms at the same distance for the Support level and similarly, find the two tops at the same distance for the Resistance level.
How to draw Support and Resistance on the Pocket Option?
Once, you have found the top and bottom of candles. Next, click on the Tools button represented as a drawing icon and select a horizontal line from the menu.
Now, Place the Horizontal line below the two bottoms for the Support level.
Similarly, Place the Horizontal line above the two tops for the Resistance level.
This is how your trading chart should look now.
You can also change the support and resistance line colour for better visibility.
How to find Support and Resistance in Day trading
Finding Support and Resistance in Day Trading is no different. You need to adjust the candlestick settings. Here are some tips for finding support and resistance levels in day trading.
First, change your default candlestick chart period to 1 minute to 15 minutes.
Next, just like above look for Intraday support and resistance levels and place the same above the two tops for the resistance level and below the two bottom for the support level.
Is Support and Resistance the same as Supply and Demand?
The concept of Support and Resistance and Supply and Demand is a bit similar but not 100% identical.
The Support is the price level at which the demand for the security increases while the supply remains constant which indicates an upcoming bullish trend.
Similarly, The Resistance is the price level at which the demand for the security decreases and with a decrease in demand, it creates room for the entry of sellers.