What is a support level?

by Jun 29, 2020Trading Guides

What is a support level?

A support level is a general level where prices have not been falling below for a certain period. This occurs when there are buyers at the price level, preventing the price of the asset dropping below that level. With regards to technical analysis, a support level may be drawn with a line across the lowest lows for the time being considered.

 

 

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What is technical analysis?

Technical analysis is a type of analysis derived purely from charts and the price movement of the security. The basis of technical analysis is that past price movement is a good indicator for future price movement. Technical analysis uses statistical trends such as trading volume and historical support / resistance levels to gauge the movement of the price in the future. This in contrast to fundamental analysis, which involves looking at a security from a financial and economic point of view.

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