Support and Resistance
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Transcript of Support and Resistance
The Academy of Financial Trading
Support & Resistance
Stop losses explained
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Risk Warning
What does Support and Resistance mean?
Support and Resistance – typically these are floors or ceilings in a market that the price has not breached or penetrated
Support & Resistance explained
Support & Resistance
It is usually as a result of background factors that affect the price movement of a given asset
Some technical traders recognise a breach in these levels as a signal to buy or sell – but is it that easy?
Let’s analyse both separately
Support – the lower level or floor in the market
Support can be considered a floor in a market or level at which the price has not fallen below for a given period of time
Usually it is found by a level the price has touched but not penetrated or fallen below
Let us now switch to a chart to illustrate this.
Support & Resistance explained
Support & Resistance
Resistance – just the opposite?
Resistance in a market is a celling or level the price has continually touched but not penetrated
Just like support, it can be as a result of background factors, news events, etc.
Does it actually show a level it will not penetrate – is it sufficient to gauge price movement?
Let us also illustrate this on a chart.
Support & Resistance explained
Support & Resistance
Are they viable, or accurate as a long term method for gauging price action?
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