Thursday, May 12, 2016

What is Support in Forex Trading

Trading in the forex market involves understanding the terms that are used in it. We’ve previously talked about the resistance levels in forex trading, and today, we’ll discuss about the support levels.

Support is the price level in which a particular currency’s value has refused to decrease further and it starts to increase in value rather. When the currency market moves downwards and starts to go back up, the lowest point that is reached before the price goes up is called the “support level”.

To easily understand what “support levels” are, think of it as a roadblock. The price goes in the direction of the roadblock, but since the roadblock literally blocks the road, the price has no other choice but to go to the other direction.

The great news about support level is they are not that difficult to distinguish. Oftentimes, the trader does not even need a high level of expertise in chart analysis to find them. It basically means that even someone who is quite new in forex, with enough knowledge and practice, can easily identify support levels. 

Support levels can appear in exact same price several times, however you need to understand that this will not be always the case. Support levels can appear in slightly different prices, it might appear slightly lower than the previous support level, but it still stays close to that price level. It is also acknowledged as a test for the support level (a test of how far the price can go down through it).

A trader can make profit using this knowledge if they know how to trade using support and resistance levels. So it is important to read articles regarding this matter to improve your trading strategies and increase your profits.
Learn more about the forex market and further refine your trading strategies by reading our forex articles. Find out who the best brokers are by referring to our official website:!

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