A concept of support and resistance points is undeniably the most discussed in the technical analysis method. The theory of resebut no doubt becomes the basic subject that must be known to beginner traders while studying technical analysis. In this article I will try to explain the basic things to know about things related to the concept of support and resistance points.

Resistance Point
For a trader who has long been involved in the trading world must have found a condition where the price is difficult to move through certain levels. For example, during a period of EUR / USD it is very difficult to move up to break the 1.3556 level. As you can see on the chart below. The 1.3556 level can be called a resistance point that you can imagine as a “roof” to prevent price moving up past it.

Support Point
While on the other side we also have a price level called a support point. This support point can be imagined as a floor that prevents the price to go down through it. As you can see in the picture below, support point can also be an option to take a chance in open BUY position.


Trendline Utilization
In the example above, you have seen a level of support and resistance points that can constantly prevent the price to move higher or lower. However, in the long term, the price will certainly move up or down in accordance with the trend that causes the support and resistance levels to be changing over time. This is why understanding of a trend and trendline becomes very important in learning the point of support and resistance. For more details, please see the picture below.

When the price trend strengthens, the support and resistance points fall off the high (peak) and low (base) which is increasing or decreasing. In the example chart above, the resistance level is formed from the declining price, while the support is marked by the low price which is also moving downwards.

Double Zero
Another characteristic of the support or resistance point is that a price will find it difficult to move through a price level that has a round number. Example: level 1500,1600 and the like. The round number is believed to be a strong level where major banks are also putting their targets at that level.

Fibonacci Retracement
In the context of technical analysis, there are many indicators that have been developed to observe a level of price resistance. Fibonacci retracement is one of the favorite indicators used by traders. The reason, Fibonacci retracement is an indicator that can calculate several levels of support and resistance variations. In the picture below, we can see where there are horizontal lines that become price resistance level.

From the description above, it can be drawn a conclusion that the point of support and resistance is able to help you improve the success of trading strategy by using it as a support pedestal. From the point of support and resistance we get the picture, when the price will bounce or will reverse direction. This becomes an important thing when you decide to open a position or find a stop loss level and take profit potential as a close position step.

Active trading is a buying and selling activity in the forex market based on chart movement to gain profit from price movement on chart chart. The mentality associated with active trading strategies is different from long-term buy-and-hold strategies. The buy-and-hold strategy uses a mentality that shows that long-term price movements will outweigh price movements in the short term and, therefore, short-term moves should be ignored. On the other hand an active trader believes that short-term movements and capture market trends are where profits are made. There are various methods used to achieve an active trading strategy, each with the right market environment and the risks inherent in the strategy.

Forex trading has many benefits and advantages that can be taken like a large amount of liquidity with low transaction costs and only use margin as a guarantee. Forex trading that runs for 24 hours a day makes many traders create and create various strategies ranging from daily trading, mid-term trading, trading trends to long term trading.

There are so many different styles and styles of each forex trader, where they usually discuss with each other what things are constrained in their trading and bring in a much better direction. For now, we will begin by discussing the two most common strategies. Where these two trading strategies are most widely used by current traders who eventually create their own trading style, Range and Trend trading
Range Trading


This trading range is a very simple strategy whereby a trader will buy a currency that is sold in the hope that the value will return to a certain point within a certain period of time. This strategy can also be referred to as meaningful reversion and similar to value investing.

One key to the success of this strategy is to identify the price points that are more profitable for you. That means identifying the price level to get into where the seller stops selling and the buyer is more likely to start buying. This price point is generally obtained by identifying the level of supply (resistance) and demand (support). Support and resistance levels can be easily obtained by performing technical analysis on the chart. Indicators and oscillators will greatly assist you in the success of this trading system
The second major strategy is to follow trends


One of the most common strategies used by new and experienced traders is a strategy that uses trends as the main direction of glue trading. Trends can identify the price direction in general has moved, then put the trade in the same direction. From here then traders can get the direction of price movements to gain profits.

The trading strategies that rely on the following trends are very popular because strong trends tend to produce good movement directions and generate substantial profit returns. Often, the strong results come from the movement toward the previous trend. Although there are several advantages, here are two advantages of trading trend.
Fortunately, the trading trend is simple. The ease of identifying trading in large part is why new and experienced traders use some form of trend analysis in their trading plans.
If you have good capital endurance, and do not want to open every day trading platform then you can try this strategy to get maximum result.

If you are interested in trying out trading trends, but are not sure where to start, find out three ways to trade a strong forex trend to your best personality.

One of the signs of reversal is usually a pattern that remains aligned with the current trend but slightly slowed down. One of the most obvious of these patterns is its sloping slope compared to previous trends.

For more details I will include the following examples:

 

If on the chart forming a chart pattern like this means the sign there is a slowdown trend. When the reversal pattern appears like this, there will be various possibilities, namely:

The price will pull back then move again continue the trend
Characteristics: Pullbacknya usually weak movement. After the pullback, the movement immediately reverses course and will usually break the trendline. Usually this is an opportunity for re-entry

Price will reverse direction
Characteristics: After pullback, the movement tries to move according to the initial trend but does not succeed in forming a new impulse and its movement tends to be slow or sloping. And usually when the price touches the previous peak / base, the price immediately reacts

Price continues the trend
Characteristics: Usually the slowdown will take the form of waves, but when the market movement against the trend instead of slowing. When this happens, there is a chance of re-entry when the market movement against its trend.