You may have heard about 3 or 4 types of support and resistance, but today I will share with you 7 types

Of support and resistance. Let's discuss them one by one:

1. Horizontal lines of support and resistance

Support: They are drawn at price levels where the asset stops falling and starts rising.

Resistance: It is drawn at price levels where the asset stops rising and starts falling.

How to draw: Locate price points where the price previously reversed, and connect them with a horizontal line.

2. Trend lines

Uptrend Line: Connects higher lows in an uptrend.

Downtrend Line: Connects lower highs in a downtrend.

How to Draw: Use wicks or candle bodies to draw a line that reflects the price trend and extends into the future.

3. Round numbers

Support and Resistance: Psychological price levels such as $10, $100, $1000, are often strong support or resistance points.

How to draw: Locate the round numbers on the chart and watch the price react around them.

4. Liquidity areas

Support and Resistance: Areas of high trading volume that represent important price levels.

How to Draw: Use tools such as a volume file to define these areas.

5. Moving averages

Support and Resistance: Moving averages such as the 50, 100, and 200 days can be dynamic support or resistance.

How to draw: Draw moving averages on the chart and follow the price reaction to them.

6. Fibonacci retracement levels

Support and Resistance: Fibonacci retracement levels identify potential support and resistance areas.

How to draw: Identify an important high and low, and use the Fibonacci retracement tool to draw levels between them.

7. Pivot points

Support and Resistance: Pivot points and associated support and resistance levels identify potential turning points.

How to plot: Calculate the pivot points using the highest, lowest, and close of the previous period, and plot them on the chart.

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