Supply and demand are the very determinants of price - any price. This applies to everything from your local farmers market, to a rare, one of a kind jewel, to the foreign exchange market. Traders that understand the dynamics of demand and supply are better equipped to understand current and future price movements in the forex market.
FIBONACCI TALKING POINTS:
- Fibonacci retracements can be applied to a variety of markets in the effort of identifying possible support or resistance levels.
- In this article, we look at how
The primitive forces of capitalism rule markets like the laws of gravity. Buyers and sellers provoke a battle to find a happy medium agreement in every financial market. As prices dance around on charts, traders are often looking for reasons to explain price movements however, the underlying source of price movement boils down to the relationship between supply and demand.
Supply and demand and support and resistance have a lot of similarities, but the aim of this page is to distinguish the two and identify how you can use support and resistance to trade supply and demand.
Support and resistance is a powerful pillar in trading and most strategies have some type of support/resistance (S/R) analysis built into them. Support and resistance tends to develop around key areas that price has regularly approached and rebounded thereafter. This article explains what support and resistance is and covers top support and resistance trading strategies.
Professional forex traders and market makers use pivot points to identify potential support and resistance levels.
Simply put, a pivot point and its support/resistance levels are areas at which the direction of price movement can possibly change.
The reason why pivot points are so enticing?
It’s because they are OBJECTIVE.
Unlike some of the other indicators that we’ve taught you about already, there’s no discretion involved.
Trend lines are probably the most common form of technical analysis in forex trading.
They are probably one of the most underutilized ones as well.
If drawn correctly, they can be as accurate as any other method.
Unfortunately, most forex traders don’t draw them correctly or try to make the line fit the market instead of the other way around.
“Support and resistance” is one of the most widely used concepts in forex trading.
Strangely enough, everyone seems to have their own idea of how you should measure support and resistance.
Let’s take a look at the basics first.
There are many different factors that affect stock market levels on a minute-to-minute basis. This includes inflation data, gross domestic product (GDP), interest rates, unemployment, supply, demand, political changes, and broader economic forces, among others.