Your capital may be at risk. This material is not an investment advice.
Do you want to determine the best moments to conclude transactions with high probability? Use the “Horizontal Line” tool on the Binomo platform! After spending a few minutes on technical analysis, you can unmistakably determine the levels of support and resistance, which means you’re almost guaranteed to make a profit!
What are support and resistance levels?
Take a look at the chart: the quotes creep up, reach a certain level, and then reverse downwards. They also rebound downwards off an invisible obstacle and again move upwards. These obstacles at the bottom and the top are levels of support and resistance. Upon reaching them, the chart is likely to reverse in the opposite direction. It is these reversal points that we use to make a profit!
To make it clearer, look at the screenshots below.
- The level at which the chart starts to move downwards after growth is called the resistance level
- The level at which the chart begins to grow after a decline is called the support level
There are few chances that the asset price will cross these levels. Why? Because these levels are where the positions of major traders are concentrated. At a certain point, the market reacts by increasing demand or supply, which pushes the quotes to reverse.
BUT! The possibility of crossing the support and resistance levels still remains.
How to use the “Horizontal Line” to determine support and resistance levels
To more precisely determine the support and resistance levels, use the “Horizontal Line”.
Now click on the places on the chart where the quotes have rebounded up or down (the lowest lows and the highest highs, the so-called “swing levels”). The level is considered stronger if quotes have rebounded off it several times.
The line at the top represents the resistance level. On the bottom is the support level. If you want to delete a line, right-click on it.
How to conclude transactions
- Transactions on increases should be concluded at the moment the support level is touched
- Transactions on decreases should be concluded at the moment the resistance level is touched