What is Support and Resistance?

What is Support and Resistance?

Placing support and resistance areas is the most important skill you can master in trading.
And placing them is easy.
Support and resistance areas divide your chart up into buy and sell areas. An area that sits above current price is a sell area, any area below current price is a buy area.

Support = Buy Area

The terms buyers and bulls are interchangeable. Support is a buy area as buyers are found at support.

Resistance = Sell Area

The terms sellers and bears are interchangeable. Resistance is a sell area as sellers are found at resistance.

On the GBPUSD chart below, you can see price is approaching the blue shaded area at 1.3500. This is a strong resistance (sell) area.