I know you have heard about Support and Resistance levels.
Coming across those terms may have drawn your curiosity to know more about them.
Because if I am not wrong, you would also like to use Support and resistance to trade profitably in Expert Option but you do not know how to do it.
In today’s post, we’ll discuss all the details you need to know about support and resistance. I will also explain how you can use Support and Resistance to Win Big in Expert Option.
Read the post to get all the important details.
What to expect in this post
- What is Support and Resistance in Forex?
- A scenario of what causes Support and Resistance.
- How to Identify Support and Resistance on Expert Option Charts.
- Why trade using support and resistance in Expert Option?
- Important considerations in Trading Using Support and Resistance.
- Using Support and Resistance to place trades on Expert Option.
What is Support and Resistance in Forex?
In Forex technical analysis, Support and Resistance are certain predetermined levels of the price of an asset at which the price tends to stop and reverse.
These levels tend not to be broken through by the price either going Upwards or downwards.
Support occurs where a Downtrend is expected to stop or pause temporarily due to a concentration of Demand!
Resistance, on the other hand, occurs where an Uptrend is expected to stop or pause temporarily due to a concentration of Supply.
That means that when Support occurs, a Downtrend will shift to become an Uptrend. Similarly, if Resistance occurs, an Uptrend will shift to become a Downtrend!
Basically, Support is like a floor supporting the price from falling any further! If the price, in any case, drops below Support, then Support is said to be broken! On the other hand if, as expected, the price does not fall below Support, then Support is said to be confirmed or held!!
On the flip side, Resistance is like a roof supporting the price from rising any further! If the price rises above the resistance level, then Resistance is said to be broken. If the price does not break the Resistance, then Resistance is confirmed or held!!
A Scenario of What Causes Support and Resistance in Forex.
What really happens so that Support and Resistance may occur?
A Support level is created when Buying Pressure exceeds Selling Pressure. This causes the price to stop falling and begin rising!
Sellers drive the price down and then bargain hunter (buyers) set in and start buying the asset. This reverses the fall in the price and the price starts rising. Buyers who miss the opportunity to buy at a discount at that time have to wait for another opportunity to buy. The next time the price falls to the Support level, they jump in and buy, taking advantage of the low price. That buying pressure that exceeds Selling Pressure causes the price of the asset to rise again!!
Note – Sometimes, the price of the asset falls to the Support level but the sellers overpower the buyers. In that case, Selling Pressure exceeds Buying Pressure at that Support level. The asset tumbles and the Support is broken!! The price will continue to fall lower!!
A Resistance level is created when Selling Pressure exceeds Buying Pressure. This causes the price to stop rising and begin falling!
The price rises to a point where people believe that it has peaked and started selling. This, in turn, causes the asset price to reverse and fall.
Those who lagged behind at that first moment see this kind of price action. When the price rises again to the Resistance level, they also decide to sell!! That will cause an increased Selling Pressure over the Buying Pressure and the price will fall again!!
Note – Sometimes at the Resistance level, the buyers overpower the sellers. This makes Buying Pressure exceed Selling Pressure at that Resistance level. Therefore, Resistance is broken!! The price continues to rise higher!!
How to Identify Support and Resistance on Expert Option Charts.
In Expert Option, there are various ways you can identify Support and Resistance levels.
The surest way to Identify Support and Resistance in Expert Option by Drawing Support and Resistance lines.
To draw support and resistance lines in Expert Option, you need to set your chart preference and Set up several Horizontal lines.
Basically, if you connect the most visible highs together using a Horizontal line, you will have a Resistance line.
Similarly, if you connect the most visible lows together using a Horizontal line, you will have a Support line.
You can have as many Support and Resistance lines as you please. Only be keen enough to pay attention to each set separately!
If you can successfully identify Support and Resistance levels, then you can use them to Trade profitably on Expert Option!!
Let’s see how.
Why trade using support and resistance in Expert Option?
The reason you should consider using Support and Resistance to Trade on Expert Option is simple! You can utilize that strategy to maximize your profits and avoid blowing your Real account! Trading to Profit and Withdraw rather than to blow the account!!
This is the reason Support and Resistance is a sure strategy. The price has historically shown a tendency to behave in a certain way. You can then take advantage of that and place winning trades on Expert Option!!
Important considerations in Trading Using Support and Resistance.
Before you apply the Support and Resistance strategy of trading in Expert Option, consider the following;
- The market conditions may not be as perfect as we would hope. Support and Resistance levels may be broken, just as we have seen. So you are not guaranteed that all trades will win. Prey on more predictable trades.
- Employ risk management in trading so that you do not end up blowing your account.
- Make use of your Expert Option free $10,000 Demo account to practice trading using Support and Resistance.
- Only after you have acquired enough expertise in your Demo account should you trade on your Real account!
Using Support and Resistance to place trades on Expert Option.
We can actually use the knowledge we have acquired on Support and Resistance to place winning trades on Expert Option.
To place trades on Expert Option using Support and Resistance;
- Log in to your Expert Option Trading account.
- Deposit enough money into your Real account.
- Set the chart type you prefer by hitting the Chart type Tab.
- Hit the Lines Tab.
- Add several Horizontal lines to your chart.
- Connect the most prominent highs with one horizontal line – Resistance Line.
- Connect the most prominent lows with another horizontal line – Support Line.
- If the price reaches the Resistance line rising, press the DOWN The price is bound to fall. The resistance level is a price at which sellers tend to enter the market.
- If the price reaches the Support line falling, press the UP The price is bound to rise. The support level is the price at which buyers tend to enter the market.
Having learned the Support and Resistance trading strategy, apply it on Expert Option and Win Big!!