Support and resistance levels are actually a range and do not have specific numbers. The range form when the buyers and sellers are competing against each.
To quickly get the idea of resistance, imagine that you are in the verge of quitting but you’re still contemplating if you really wanted to. So, now you are now staying behind the line thinking what you should really do – to quit or not to quit.
How to Plot Forex Support and Resistance
- Identify if the currency pair is in a range or in a trend.
- Look for 2 or more points with almost the same level to determine the support and resistance level.
- Draw the resistance and support area using a line.
Did you notice that in the above candlestick chart there is a vertical line piercing through each of the candlestick body?
They are called the shadows (tail). They are indicators that “test” the support and resistance level of the currency pair.