- Written by Sywa Sywa
- Last Updated: 27 August 2021 27 August 2021
- Created: 16 April 2021 16 April 2021
The most basic skills for every trader is to able to Draw Support and Resistance Correctly, it is so basic that it should be the first skill to master before one even learn other Technical Analysis skill.
So What is a Support and Resistance lines ?
Support is a Price level or a zone of a certain asset's or futures that prevent a price to fall even further. Support reflecting Market psychology where Bear power exhausted and Bulls are coming in, Because the price is quite low, more and more people are more eager to buy rather than sell which in return bounce the price to goes up.
Resistance in the other hand is a price level or a zone of a certain asset's or futures that Resist the price to goes even higher because this is the price level where most people will be more eager sell their position either for profit taking or for "Sell the High".
Support and Resistance is not a permanent things, Support and Resistance line can and will be break over time if there are enough catalyst in the Market.
There are two types of Support and Resistance : Static and Dynamic.
A Static Support and Resistance are solely based on the price itself, drawing a static support and resistance lines is actually quite straight forward, we begin to find a price level in the past where when a price touches that level it bounce and hold that level.
A Dynamic Support and Resistance are provided by Indicator, the most simple example is by using Moving Average Indicator as Support and Resistance level.
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