This is a picture of a support and resistance level (ok, maybe not).
Support and resistance levels are one of my favorite places on the chart. When I am looking for a place on the chart where a currency pair may reverse, I look to support/resistance levels. After all, these support/resistance levels are the sweet spots on the chart, places where the market often turns around and goes the other way. However, I do not always expect price to reverse at these levels. I do not consider these levels on the chart to be walls, but rather these support/resistance levels are much like a beer belly.
You read that correctly, I see these levels just as I do a beer belly. If you push into it far enough it will push back. A beer belly may be a bit fuzzy, so you don’t really know where it begins. And finally, a beer belly is really easy to pick out, just like support/resistance levels on the chart.
On the next post I will point out some of the things I look for when I am placing the support/resistance levels on my chart.
