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Support and Resistance

Free guides to help you get started with trading and market analysis.

 

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Disclaimer: The trading guides provided do not contain and should not be considered to contain any personal investment advice or recommendations. It does not guarantee a better trading performance on your live trading account. You could lose substantially more than your initial investment when trading on a live account.

Identify Key Market Levels

Perhaps the key building block of technical analysis -- the most fundamental component -- is support and resistance analysis. Support and resistance can be thought of as key levels that are likely to be where orders are placed; as such, they are, akin to key battle area in the ongoing war between bears and bulls. A deep understanding of support and resistance can help traders learn where to expect reversals, where trends may gather momentum, and where to place orders. Specifically, this guide goes into the following technical analysis concepts:
 

  • Defining the terms support and resistance

  • How to draw horizontal support and resistance lines

  • Understanding the concept of support and resistance zones

  • Using candlestick patterns to validate support and resistance areas

  • Drawing diagonally sloped support and resistance lines (also known as trendlines and price channels)

  • Using pivot points to mathematically identify where support and resistance levels may emerge

  • Fibonacci lines and how they can be used to measure how far markets can go before running into support and resistance levels

  • How the moving average of price is something traders watch, and thus can also be used as a support/resistance indicator

  • Confluence: Putting it all together to identify high probability setups

Complete the form to view the ThinkMarkets Guide to Support and Resistance and all our other guides as well. Enjoy a free preview of the Table of Contents below.

  • View Table of Contents
    Risk Warning 3
    Support & Resistance Explained 4
         Support & Resistance Interchange 5
    Methods to Identify S/R 6
         Horizontal S/R 6
         Zones 7
         Long Wicks/Tails 8
         Channels/Trendlines 9
         Pivot Points 10
         Fibonacci 11
         Moving Average (MA) 12
         Using Confluences of S/R 13
         Confluences: Trendline & Horizontal S/R 13
         Confluences: Fibonacci; Horizontal S/R; Moving Average 14
         Confluences: Trendline Resistance; 200eMA; Potential Chart Pattern 15
         Confluences: Fibonacci; Pivotal S/R; Rejection Spikes 16
    Summary 17
    Reduce Your Learning Curve 18
Support and Resistance
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