Resistance is one of the top concepts in forex that you need to know. If you’re going to be charting and interpreting your own data, you’ll find that resistance matters a lot more than you might imagine. It’s just a matter of getting down to the concept and looking at raw data properly.
Everyone talks about resistance differently, but we’ll give you some general points to think about.
First and foremost, resistance is essentially the highest point where the market moved before falling back down again. There are multiple resistance points formed, and it will be up to you to calculate them.
If you’re going to be using forex software to trade, you should be aware that most computer programs will automatically give you support as well as resistance values for forex. Does that mean that you automatically have to listen to that? Not at all. It’s going to be up to you to figure out what resistance points matter to you.
Of course, even if you do want to rely on the computer, you should at least learn how to plot resistance points for yourself. Computers do make mistakes, and they are prone to looking at things from a perspective that we might not share. The more knowledge you have, the more power you will gain over time.
The funny thing about support and resistance is that they can definitely change hands. You might get to a point where the market surges forward — that would change your resistance points. The biggest thing that you don’t want to do is find that you’re blindly following your chart. Make sure that you rely on the other types of forex analysis, such as fundamental analysis and sentiment analysis in order to really ensure you’re calling all of the right shots.
If all of this sounds like Martian to you, don’t worry — it starts out that way but it definitely gets easier as time passes! Good luck out there!
