​​#education Understanding trading levels In our previous | OctaFX Official

​​#education

Understanding trading levels

In our previous post, we learned what trading levels are. Today we're going to learn how to understand them.

There are two types of trading levels: support and resistance.

A support level is the price 'floor', a concentration of recent and current minimal prices. So it is usually marked with green on the charts.
A resistance level is the price 'ceiling', so the price cannot go above this level. This level is the concentration of the highest recent and current prices, usually marked with red on charts.

The levels are drawn from right to left, from more current prices to older ones.

Any level has strength. The level strength is determined by the number of touches and the size of the timeframe. The higher the timeframe, the stronger the level. For example, the resistance level on the weekly chart is stronger than the daily one.

If you’re looking for a comfortable entry point, a shorter stop-loss, and bigger trading volume, find strong support and resistance