Psychological Levels of Support and Resistance
Support and resistance are two price levels where traders expect it to reverse. These are also called psychological thresholds or price action in chart analysis.
Significance of Zones The concepts of trading level support and resistance are undoubtedly two of the most highly discussed attributes of technical analysis. Part of analyzing chart patterns, these terms are used by traders to refer to price levels on charts that tend to act as barriers, preventing the price of an asset from getting pushed in a certain direction.
They repeat again and again, which creates a trading habit and good entry points for traders. Resistance is created from previous top price levels. The price often rises and goes back to the old peak, then touches the resistance zone.
Resistance and support lines plotted on the chart
If it is the case, there will be a high probability that the price will reverse and go down. On the contrary, support is created from previous bottom price levels.
And when the price falls, goes back to the old bottom then touches the support zone, it tends to reverse and go up. It is a price range.
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The price range made from many tops is called the strong resistance zone. After that, their 2 functions will be replaced for each other. Old support becomes new resistance.
And vice versa, old resistance becomes new support. Important rules of support and resistance During the increase and decrease processes, the price creates many temporary tops and bottoms.
How to draw support and resistance in IQ Option From a previous top, you can draw a resistance line. Resistance level in IQ Option From a previous bottom, you can draw a support line. Support level at IQ Option How to identify support and resistance zones Firstly, this is a price range.
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For example, this is the strong resistance zone made from triple tops. How to identify a resistance level This support and resistance indicator for options a bottom zone support zone. When the price enters this area, there is a high chance that it will rebound.
The price increases sharply and breaks out of the resistance area and continues to rise. At this point, the old resistance level will become a new support level.
Therefore, it is necessary to have reasonable strategies to trade effectively in IQ Option. There are many ways to choose the expiration time of an option according to the above formula. Trading with candlestick colors If you do not understand what IQ Option trading based on the color of the candlestick is, please read the following article.
Instructions on how to enter the IQ Option command according to the candle color. Trading with the colors of the candlestick Trading with price support and resistance indicator for options As soon as the price enters the support or resistance zone, you can open an option. Usually, with this trading technique, you can set the expiration time longer than the Japanese candlestick time.
This is a long-time trade. Trading with price action It means when you observe the 5-minute candlestick pattern, you can open options from 10 to 15 minutes.
Indicators and Strategies
Because after entering the support or resistance level, the price may not reverse immediately. You need a longer time for the price to reverse. Capital management when trading with support and resistance indicators in IQ Option When the price moves in a support or resistance level, you should only open 1 reversal option there. Combine with candlestick patterns.