What is the difference between support and resistance?

‘Support’ and ‘resistance’ are terms for two respective levels on a price chart that appear to limit the market’s range of movement. The support level is where the price regularly stops falling and bounces back up, while the resistance level is where the price normally stops rising and dips back down.

What are major support and resistance areas?

Major support and resistance areas are price levels that have recently caused a trend reversal. If the price was trending higher and then reversed into a downtrend, the price where the reversal took place is a strong resistance level. Where a downtrend ends and an uptrend begins is a strong support level.

How to calculate strong support and resistance levels?

The following rules will help you to calculate strong support and resistance levels. Support and resistance levels should be in a straight horizontal position. Don’t confuse them with sloping support and resistance lines. We’ll talk about them later. Take higher timeframes into account. We mean monthly, weekly, and daily timeframes.

What is the psychology behind support and resistance?

The rationale is that as the price rises and approaches resistance, sellers (supply) become more inclined to sell and buyers (demand) become less willing to buy. Let’s use a few examples of market participants to explain the psychology behind support and resistance.