Trends, Setbacks, Breaks

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Areas of PricesDo not be disappointed if the S & R lines have not worked for you until now. Actually, supports and resistors are price zones, not an exact number. This is clearly visible when changing from a higher temporal scale to a lower one: a horizontal line in a weekly chart can be perfectly constructed by a horizontal price channel on a time chart.This is the reason why what appears to be a break of a support or resistance level is only a proof of that level. These “tests” of support and resistance are usually represented by the wicks of the sails piercing the S & R levels.If the market were composed of S & R lines and not by human beings, then the exchange rate would always go up and down to the same price points, again and again. But because that rarely happens, it is important to consider support and resistances as areas on the chart, where market participants buy and sell.One way to induce the habit of treating S & R lines as zones is to draw them with thick lines, avoiding fine lines. That way you will not fool yourself into believing that you have identified the exact price at which a currency pair is going to turn around and start moving in the opposite direction. And even better: draw the lines, especially the horizontal lines, using two lines, one upper and one lower, or use rectangles to mark the zones. Surely your graphics platform has all these tool

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