Support and Resistance Levels

Markets resists on falling prices, and falling begins to slow or stop in support. Rising prices stop to rise in resistance. Support and resistance show psychological level of invesment tool which is traded. It is supposed that purchase pressure comes while it is approached to support level, selling pressure comes while it is approached to resistance level. A support and resistance are reliable as much as it is tested before. Of course, there is no rule that reliable strong level is unbreakable. It is accepted levels which occur with volume are stronger. Because volume shows measure of trade, it reflects perception world of people who trade. The latest formed levels always make an stronger impression than previous levels.

Price represents value which is given by markets. If there is a purchase and sale in the market, there is a movement in price. If falling begins, value which is given by market is little. If Value, which is perceived by falling market, is not unchanged, it begins to slow, and it begins to rise again with demand according to expectation. Same situation is valid for resistance, too. Support and resistance levels occurs mainstay for purchase and and sale strategies. Trend lines are drawn by using suupor-resistance point