What is The Significance of Support And Resistance in Forex Trading?

For experienced traders who have been engaged in the field of forex trading in India for quite some time, it may not come as a surprise where they observe that there are areas of the chart where certain pairs face support or resistance in moving along. This is a vital piece of information as they represent the barriers for a particular pair to rise or fall and can arrest the fluctuation of the currency in that particular range. For novice traders who begin by hedging bets on rising or falling currencies, it is important to know about these support and resistance zones and their various types as they are highly vital while carrying out technical analysis in online trading. – Traditional swing highs and lows: These swings help traders get a “bird’s eye view of the market” and the major turning points within it. – Stepping swing point levels in trends: Traders should look for these ‘stepping’ levels called trading pullbacks as they can look to trade when by retracing the market back to those levels. – Swing point levels as containment and risk management: Traders can use the swing points as a means to short their trades. They can use the resistance levels and sell from them with the support level as a Profit target. – Dynamic support and resistance levels: These refer to trends that are essentially moving averages and help traders quickly ascertain the direction of the FX market. – 50% Retracement levels: Markets often hold the halfway point of a swing after which the market either moves forward with full vigor or it bounces back in the original direction. This can be used by traders to retrace the drop and make short sells. Support/Resistance levels reflect the tendencies of the entire market. Traders should bear this in mind while they are engaged in forex trading in India as it helps them ascertain the right points where they have to enter the market and exit it. Alongside a great strategy, it is equally vital for traders to ally themselves with reputed brokers as they can gain access to expert guidance and thereby improve their trading strategies and performance.

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