talkforfinance.com

Sep08

Finding A Criteria Of Support And Resistance Levels For Your Online Trading

The main thing when trading according to the levels of support and resistance is to build a good criteria of the breakthrough of these levels as a point to enter the market. The goal of every Singapore trader is to find the best moment of entering the market. A trading technique of support and resistance levels provides perfect opportunities to catch a good trend. Singapore Forex market is very spontaneous and unpredictable. Its complex system is influenced by many factors of the outside world and causes its movements.

Let’s use the graphs of any Singapore broker to see what is hidden behind a candlestick chart when it shows a potential breakthrough of the support or resistance level. The most tolerant traders who are already in the market and keep the open positions will have their positions open hoping for the end of the market’s correction. The more emotional traders will see the opportunity to enter the market on the opposite side, hoping to catch the top of the market’s trend. The rest will remain as watchers, not entering the game and their opinions on the further development of the situation will be different.

At this time, the direction of rates stays uncertain, since the views of the traders in the market are different. In addition to that there are still many other traders who are currently not trading and they are not in a hurry to enter it.

Every person has his own minimal measure of minimum uncertainty that is needed to enter the market. This criterion is directly influenced by the psychology of the trader. As every trader has his own levels of risk, so they will start trading at a certain price level at different time. When the majority of traders make their decision and enter the market in a certain direction, the market will become the most certain. In the graphs it will be presented by a long trend in a certain direction accompanied by some price corrections.

There are a number of external factors that decide the market’s direction. The most important one is a fundamental aspect based on the analysis of the macroeconomic indicators as well as the technical conditions laid down in the past movements. When all these factors contribute to the price movement in the same direction, an experienced trader has an ability to predict a good trend before it starts.

Yet, if you do not have much [spin]knowledge to recognize a good trend with a high level of probability, we recommend you to make a detailed analysis of the price movements in the past along with technical and fundamental analyses that will give you much more certainty than watching the chart waiting for the breakthrough of the resistance or support levels.