Support and resistance candlestick trading

Support and resistance candlestick trading

In candlestick trading, a trader should be very careful to detect support and resistance levels. The most commonly used support and resistance levels used are the daily support and resistance levels.

For a trader to be able to detect the support and resistance levels more easily, he or she should download a support and resistance indicator.

A support level is a market price at which the trend of a downward candlestick pattern reverses. If a downward trend reaches the resistance level, it is more probable that it will reverse or change to an upward trend. This is especially so if there is the formation of a hammer candlestick.

A resistance level on the other hand, is a market price at which an upward market price trend reverses once it approaches. If an upward trend reaches the resistance level, it is more probable that it will reverse or change to a downward trend. This is especially so if there is the formation of a hammer candlestick.

Candlestick pattern in stock analysis