Support Line

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Adding Support Lines

The Support Line tool draws horizontal lines on the chart and is used to identify support or resistance lines. A Support line is drawn directly beneath the price action, whilst a Resistance line is drawn directly above the price action. When a price penetrates the horizontal line, a breakout has occurred.

It has long been recognised that the market has a tendency to remember certain price levels, and trade back to them, that is, double tops, triple tops etc.

Prices breaking a support level represent a bearish signal, while breaking of a resistance level is bullish. However, if the market reaches the level and fails to penetrate them the market may reverse and trade in the other direction.

Markets can trade back and forth many times in a congestion area, so look to the overbought/oversold indicators to assist in these markets.