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show this video
and continue..
http://www.10-minute-forex-wealth-
builder.com/supportresistance/supportresistance.html |
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What is support?
Support is the price level at which demand is thought to be
strong enough to
prevent the price from declining further. The logic dictates
that as the price
declines towards support and gets cheaper, buyers become
more inclined to buy
and sellers become less inclined to sell. By the time the
price reaches the support
level, it is believed that demand will overcome supply and
prevent the price from
falling below support.
What is resistance?
Resistance is the price level at which selling is thought to
be strong enough to
prevent the price from rising further. The logic dictates
that as the price
advances towards resistance, sellers become more inclined to
sell and buyers
become less inclined to buy. By the time the price reaches
the resistance level,it
is believed that supply will overcome demand and prevent the
price from rising
above resistance.
Below there are two examples of support and resistance in
action on a Daily
chart of the EUR/USD. The first example is using horizontal
support and
resistance and the second example is using a trend line. The
arrows show points
at which the line rejected price. As you may notice from
looking at the first
example once a strong support level is broken it turns into
strong resistance, the
same goes for a strong resistance level, when it is broken
it becomes support.
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