How to Determine SNR Level with Horizontal Line?
SNR (Support and Resistance) plays an important role in trading. Where these levels will signal traders where the price will stop and make a turning point. Many traders already use these levels for transactions. This is because these levels are barriers that reflect market behavior. In finding balance or trend levels, there are lots of support and resistance level tools that traders can use, namely horizontal lines and trendlines.
These two tools are often used by traders to mark significant levels that are predicted to be crossed or reflect prices. In determining the level of support and resistance traders need to know the structure of the candle, in one candle is formed by 4 prices, namely:
1. Open Price (O)
2. High Price (H)
3. Low Price (L)
4. Close Price (C)
Keeping in mind the OHLC (Open High Low Close) will really help traders to find support and resistance levels.
How to Draw Support and Resistance Levels
Technically, the support and resistance levels are simply a horizontal line drawn through one or more points where the price has recorded a distinguishable high (high) and a low (low) during a certain period. This line can rest on a single point, but several notes at the same level can make it more reliable.
The support level is always below the current market price. This level serves as a confirmation point for a downtrend in the market and can reflect the price upwards (up).
The resistance level is always above the current market price. This level controls the upward movement and can reverse the price downwards (down).
In general, support and resistance levels act according to their name. The support level will support the price from below like a foundation that serves as a strong support to rise. Whereas the resistance level limits the upside potential by testing the strength of the uptrend in the market – so, from above the resistance holds the bullish move.
Note:
Comments
Post a Comment