Support Level is a price level on a forex chart that indicates the minimum price for a specific period of time.
The concept of Resistance Level is the opposite of a support level.
Breakout of a Support Level
A support level breakout occurs when the price moves downward. Typically, with a strong support level, the price hits the line and either fails to break through or does so after multiple attempts. In market terminology, bears push the price down, while bulls push it up. Therefore, if the price encounters difficulty moving lower at a certain level, it is said that “bulls are offering resistance.”
When a support level is broken, it becomes a resistance level. There are many support and resistance indicators.
FAQ
What is a support level in forex?
A support level is a price level on a forex chart that represents the lowest point a currency pair is likely to reach during a specific period.
How can traders use support levels?
Traders use support levels to determine potential entry points for buying or to set stop-loss orders to limit losses if the price breaks below the support level.
What happens when a support level is broken?
When a support level is broken, it often turns into a resistance level, meaning the price may face challenges rising above that level in the future.
