Two of the main forces that determine the direction of the price of various assets is support and resistance.These are the main attributes of technical analysis. As a matter of fact, support and resistance levels come in variety of sizes and shapes. Support is the force exerted on the price of the assets to cause it to move upward when more traders are buying than selling. Resistance is the opposite force, it is the force exerted on the price of the assets to move downward. More traders are selling than buying. These two forces are of vital importance because they are used to make trading decisions and determine the exact time when a trend is about to reverse. In terms of binary options this helps traders make a "call" or "put" decision on the direction of the price of the asset based on how much support or resistance they are seeing in the charts. Below is another way of understanding the meaning of the two forces.
LEVEL OF SUPPORT
Support is a price level at which a currency pair or the price of an asset stops moving down, then it is likely to turn around and begin climbing.
LEVEL OF RESISTANCE
A resistance level is the opposite of a support level. Resistance can be seen as a price level at which a currency pair or the price of an asset will stop moving up, then it will turn around and finally may start falling. Both level of support and level of resistance is essentially the key psychological levels in the financial market that influence the direction of the price of the asset.
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