Forex Support level – an explanation for beginners


Forex Support level (also known as the currency exchange or currency) – a horizontal line the bottom of the price range of trading in the currency market. You could see that the lowest points of days will shape the trend patterns. This is the line of your Forex support level.

This is a psychological level, as investors believe that the price should be bought. And they will continue to buy when price supports these lower prices, thus forming a support for the purchase of the base currency.

However, the new break below support level indicates a willingness of investors to sell more low prices, possibly due to changes in economic factors that make the currency more devalued. If it is below the psychological level, investors who want to buy, take the attitude of "wait and see", to see if they can get it even cheaper prices.

The lack of incentives for the purchase of these more cheap levels will lead to a drop in the currency even more. Quick currency trend may cause a decrease in a panic sale of foreign currency, which will make prices spiral even faster.

The base currency will go down until the buyers do not find that the currency is undervalued and a & # 39 is a bargain for such a cheap price, and expects that soon it will begin to grow as the global economic situation and improve. They form a new level of support for the purchase, if they feel that they have the potential to get very high returns, but the possibility of losses is limited.