BeForex

Resistance Lines

Resistance Lines are drawn through previous pivot highs. Resistance acts like a ceiling. Depending on its stregth, a resistance line can pause an up trend and when very strong can reverse an up trend. Its strength is determined by the length of time it serves as resistence and the number of times it has been touched by price. The longer the period of time, the greater the strength of the line. Some traders will sell at resistance lines.


Support lines

Support lines act like a floor and are price areas where a currency pair finds it difficult to penetrate below the Support Line. Support lines are drawn through a previous set of lows and can either pause a downtrend or reverse it depending on the strength of the Support Line. Some traders buy at support lines.
All traders see the same things.

Do not BUY close to resistance lines
Do not SELL close to support lines

as there is a goog chance there will be a reversal.


Trendlines

It is important for traders to know which way the market is going, i.e. is it trending up or dawn or even going sideways. Money can be made in all these conditions, but it is
important that traders "Trade with the Trend".
A trendline is a straight line that connects key prices areas in a move, an up trendline connects successive Higher Lows or Higher Highs and a down trendline connects succesive Lower Highs or Lower Lows. Trendlines connecting successive Lower Highs is also knows as a resistance line while a trendline connecting succesive Higher Lows is also known as a support line. Trendlines can be defined as border lines for making buy or sell decisions. Trendlines form the boundary lines for most of the chart patterns.

A Trendline of about 45 degrees is considered the most reliable, and if steeper than that the market typically cannot sustain that kind of momentum for long. Watch to see if the market bounces off a trendline or slices through. Watch for retest of the trendline after the price has scliced through. You will often find good buying or selling points at the 3rd touch of a trendline.