Question about Support & Resistance

I am still trying to learn how to analyse charts. I have found Support and Resistance plotting but i just wanted to confirm, is S&R only designed for analysing for possible swing position? What about if you are looking to place a position before a quick jump or fall?

Also is it safer to place buys over sells? Since sells is borrowing right?

Alex

S&R are points where price will bounce off or have a hard time going through. They're also significant levels of interest to traders, so worth keeping an eye on.

They're also good for timing trades - if you want to buy, then you're looking for a good support level to time your entry. The opposite is true if you're looking to sell.

Buying and selling both carry risk. Neither is better than the other in a Forex environment, nor is selling borrowing. In FX, what you buy and sell is currency and given its dual nature, you are simultaneously long and short either in a given pair.

For example, if you are long Eur/Usd, then you either bought Eur, or sold Usd. If you are short the pair, then you sold Eur, or bought Usd.

What you are thinking of is short-selling, which is unique to stocks. In this case, you are effectively borrowing stock at a certain price and giving it back at a future price. The difference between the two represents your profit/loss.

Hope it helps.

savisaar2 said:

I am still trying to learn how to analyse charts. I have found Support and Resistance plotting but i just wanted to confirm, is S&R only designed for analysing for possible swing position? What about if you are looking to place a position before a quick jump or fall?

Also is it safer to place buys over sells? Since sells is borrowing right?

Alex

Click to expand...

The quick of S&R levels fits one short sentence: After quick jump will be drop and vice versa.
Try to extract as much profit as you can from it.
Good luck

All i'd say is pick your own S/R levels and stick to them. DOnt worry abut what anyone else says. When price hits theses level, you simply have to decide if price is going to break through, or bounce off

Past support and resistance levels are just that: in the past.

In the present no level is support or resistance until it is proven as so.

nunrgguy said:

Past support and resistance levels are just that: in the past.

In the present no level is support or resistance until it is proven as so.

Click to expand...

Agreed, and remember S/R levels are there to be broken. And at times, the simply offer no support or resistance at all.

So S&R is mainly used as a Past Analysis? BB seem to be a better method of detecting Trends as they happen?

Alex

savisaar2 said:

So S&R is mainly used as a Past Analysis? BB seem to be a better method of detecting Trends as they happen?

Alex

Click to expand...

It depends on the fundamental state of the market. You should understand if a currency is weak it can break push through S/R levels. But generally S/R levels mean where SL of most members are set When they trigger price will bounce off respectively.

ffsear said:

Agreed, and remember S/R levels are there to be broken. And at times, the simply offer no support or resistance at all.

Click to expand...

Exactly.
i.e what most will define as support or resistance - previous price levels are, largely, irrelevant.
Is price finding support NOW (from YOUR POV), is price meeting resistance NOW (from YOUR POV)

You can draw lines all over your chart and price will, at some point in the future, react to all of them.