Trading CFDs involves a significant risk of loss that may not be suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your exposure.

Trading CFDs involves a significant risk of loss that may not be suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your exposure.

Support and Resistance in Online Trading

Identifying Support and Resistance Levels

Two of the most fundamental concepts used to understand Forex charts are support and resistance levels. Support and resistance levels help to understand the price movements in trading charts and are used to make knowledge based trading decisions.Price support is a level that prices would normally stay above. Chart 1 shows that prices tend to remain above the support line, which is represented by the blue line located below the candlesticks. Price resistance, however, is a level that prices tend to stay below. As illustrated in chart 1, prices do not exceed the top resistance level line.

EURUSD Support & Resistance
Figure 1: Support and Resistance Levels

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