Guidelines for support and resistance
Overhead Resistance Overhead resistance occurs when sales pressure exceeds purchase demand, leading to lower prices, at least for a period of time.
Support Underlying support occurs when the purchase request overcomes sales pressure, putting a temporary floor under the stock
The support zones can act as a resistance and the zones of resistance can serve as support.
Horizontal Consolidation Regions A horizontal consolidation region is a region of horizontal price movement that has many price overlaps with a flat bottom, a flat top, or both. When prices rise, currency pairs often reverse the direction or stall. Long and tight HCRs (a lot of price overlap) work better than those that are short or loose (winding prices).
Do not place orders to buy and sell trading signals, and do not place stop loss orders at numbers ending in zero. This is where everyone will place their trading orders, perhaps triggering unusual price fluctuations
Use the nearest round number (a number ending with a zero) to guess where the price will stagnate or reverse, even if the Forex has never climbed so high
Objects that show support will often show resistance in the future and vice versa.
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