HOW TO PLOT SUPPORT AND RESISTANCE LEVELS

 WHAT ARE SUPPORT AND RESISTANCE LEVELS?

I believe that a diagram will explain what support and resistance levels are, since no diagram I’ll use the next best thing- writing.

Support and resistance levels can be explained using a bouncing ball, if I bounce a ball, it hits the ground goes up to a certain height returns to the ground than goes up again. The height the ball reached before it returns to the ground could be called the resistance and the ground is the support. On a technical analysis chart, a certain currency pair movement could be going up & down, up & down, bouncing on support and resistance levels, going up & down changing supports levels to resistance levels and vise versa. Support and resistance levels could be very profitable levels but, how do I know which one is a support and resistance level and how do I plot them?  

First, this is how to know a support and resistance level, when the market moves up and pulls back the highest point reached before it pulled back  is the resistance, (remember the bouncing ball). And as the market continues move down the lowest point it reach before it starts to move up is the support, (just like a zig zag thing).

Second, this is how to plot support and resistance levels. The best way to plot support and resistance is to use LINE CHART instead of candle stick charts. This is because, one, support and resistance levels are not real numbers (many trading plate forms show support and resistance as numbers), but they are more like zones. Two when plotting support and resistance levels I want only the closing price and line chart show only the closing on like candlestick that show the closing price as well as the low, high and open price. This other details are not needed when plotting support and resistance levels when Forex trading.

Finally, its better to plot support and resistance levels when I see the currency price movement forming several peaks and valleys.

Thank you for reading.