Support and Resistance in Technical Analysis for Binary Options
Support and resistance are among the most widely known and widely used Forex trading concepts and strategies. These are the levels in the markets, which price has not been able to break outside of.
Support levels are the areas which price cannot seem to break below. If a break does happen, it is only temporary and the price soon returns above the level. Resistance levels are the areas, which prevent the price from rising further.
These levels act like a ceiling and appear to force price back down when it tries to break above the level. It is essential to bear in mind that support and resistance levels are not exact numbers, but offer traders a clear indication based on past performance that when price reaches either a support or resistance level it is likely to bounce back.
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