Introduction
Trading binary options is a popular way of making money online. However, it can be difficult to get started if you are new to the game. In this tutorial, we will be discussing how to draw support and resistance lines to help you make better trading decisions.
What are Support and Resistance?
Before we dive into drawing these lines, let’s first define what support and resistance are. Support is a price level where buyers are expected to enter the market, while resistance is a price level where sellers are expected to enter the market. These levels can be drawn as horizontal lines on a chart.
Drawing Support and Resistance Lines
To draw support and resistance lines, you will need to look at a chart of the asset you are interested in trading. Start by identifying the major highs and lows on the chart. These are the areas where the price has previously reversed. Once you have identified these levels, draw a horizontal line connecting the tops of the highs and the bottoms of the lows. These lines will act as support and resistance levels.
Using Support and Resistance to Make Trading Decisions
Now that you have drawn your support and resistance lines, you can use them to make trading decisions. When the price is approaching a support level, it is a good time to buy. When the price is approaching a resistance level, it is a good time to sell. However, it is important to note that support and resistance levels are not always exact. The price may bounce off a level or it may break through it. It is important to be aware of these potential scenarios and adjust your trading strategy accordingly.
Other Factors to Consider
While support and resistance lines can be helpful in making trading decisions, there are other factors to consider. These include market trends, economic indicators, and news events. It is important to keep up to date on these factors to make informed trading decisions.
Conclusion
Drawing support and resistance lines is a simple but effective way of improving your binary options trading strategy. By identifying these levels, you can make better trading decisions and increase your chances of success. However, it is important to remember that there are other factors to consider when trading and to always be aware of potential risks.
