Support
A price area where buying has previously stopped a decline. Once broken, support often becomes resistance.
In practice
EUR/USD bounces three times from around 1.0800 over two weeks. Traders mark that area as support and may look to buy near it, with a stop placed below it.
Treating support as an exact price. It is a zone, and stops placed exactly on the line are easily hit.
Related terms
Resistance
A price area where selling has previously stopped a rally. Once…
Breakout
A move through support, resistance or a range boundary, often with…
Confluence
Several independent reasons pointing to the same level or trade,…
Double bottom
Two lows at a similar level with a rally between. A break above…
Fibonacci retracement
Levels at 23.6%, 38.2%, 50%, 61.8% and 78.6% of a prior swing,…
Ichimoku Cloud
A Japanese indicator system that shows trend, momentum and support…