Interpreting the Ebbs & Flows of an asset with Support & Resistance

Financial assets ebb and flow; they go up, they come down and they move sideways as traders try to understand price action. The primary ways we make sense of these movements are analyzing the price action as well as the price levels of an asset and where price bounced higher or rotated lower, we call these levels support and resistance.

Support and resistance levels form the foundation of technical analysis and they help us build a framework from which we can understand the market. For price action traders, support and resistance levels help us plan our stop loss placements and profit targets, but perhaps more importantly, these levels give us a way to make sense of the market in terms of what it has done, what it is doing and what it might do next.

Support and resistance levels are the foundation of any good trading strategy. Whether you’re trading a simple price action strategy or something more complex, these levels form the road map to trading success.

Barry Norman  
The Director of Investors Trading Academy as well as a published author and educator. Barry brings with him over 35 years of financial market knowledge and experience. He holds an MBA in Finance and Economics from UCLA and an undergraduate degree in Economics from the University of Maryland. Barry was award the title of “Best Education in Europe” by Global Banking & Finance. Barry is also a presenter for the MoneyShow and many well-known news sources.