The terms forex support and resistance are fairly popular in the world of forex trading. It is one of the most frequently used techniques in technical analysis. Without it, traders will experience difficulties and even losses in carrying out trading activities.

Indeed, how much impact and benefit can traders experience with support or resistance. You need to learn how to apply and use support and resistance analysis from the best forex broker. The will help you maximize profit potential in trading.

It's time for you to find an easy way to determine support and resistance with simple indicators. In simple terms, support and resistance are likened to the two attributes that are most discussed in the analysis. 

Support is a level that has the potential to withstand price declines. Meanwhile, resistance is a level area that has the potential to hold back price increases. These levels are used to determine whether the price will continue or reverse direction.

Forex support and resistance aim to find out the right area when taking a buy or sell position and determine the target of price movement. The support area is generally an area that is used as a reference to find buy positions, while the resistance area is used as a reference to find short positions.

Differences in the Focus of Forex Support and Resistance

According to salmamarket forex broker, support and resistance analysis aims to find out the right area when taking a buy or sell position. It will determine the target of price movements. The support area is generally an area that is used as a reference to find buy positions.

Meanwhile, the resistance area is used as a reference to find short positions. Therefore, support and resistance can be combined in the form of a candlestick which is believed to determine the next movement.

A condition in which demand increases and supply begins to decrease can be interpreted as economic support. This will make prices rise at that level. However, if the market price falls and breaks through the support level, then we can predict the price will continue to fall. 

You can say that the market will fall until the next support level. The support level that has been broken can become a resistance level and pressure the market price to keep going down. 

However, if the opposite occurs, where the market price does not penetrate the support level, it can be predicted that the market price will reverse towards the resistance level. So, you better watch out the forex support and resistance.

On the other hand, a level where demand has begun to decrease and supply exceeds the maximum limit can be interpreted as economic resistance. In this condition, the market price will tend to fall to that level.

If the market price continues to rise and manages to break through the resistance level, then we can predict that the market price will continue to rise until the next resistance level. In this condition, you will get new support. 

Important Things to Consider in Determining Forex Support and Resistance

Although many methods can be used to determine support and resistance levels in the market, without regular practice a trader will not be able to place support and resistance points properly and correctly.

For those of you who are still beginners, make sure you continue to do a lot of analysis, practice, and try to practice through a demo account so that your abilities can continue to grow. Understanding trends remains the main capital that you must have.

For traders who are still learning forex support and resistance, you can use the support area if you want to determine a position. Try to keep the price in an uptrend if you want to take a buy position, concerning the support area.

However, if you want to open a sell position, make sure the price is in a downtrend with resistance as the price reference. Placement of stop-loss (SL) and take-profit (TP) can also take advantage of support and resistance.

For example, for a long position, you can place the SL below the support and the TP below the nearest resistance. On the other hand, for short positions, place the SL and TP according to the forex support and resistance.