Support and resistance are ways traders predict the current price level and project future price movements. In addition, Support and resistance serve as indicators or as a means of confirming price movements. Therefore, we should not rely solely on support and resistance to look for entry and exit signals. To get good entry and exit signals, trading signals are still needed.
The key level of resistance or support does not have to be determined from every visible level alone. However, we only take levels where there is a significant reversal in the direction of price movement. The following are 3 basic principles on how to determine support and resistance:
- The MA indicator line that previously showed the limit of the resistance level will change to show the support level if it is successfully broken, and vice versa.
- The horizontal line of the support level will change its function as a resistance level line if it is successfully broken, and vice versa.
- The trend-up line as support will change its function as a resistance line when it has been broken out, and vice versa.
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