Classical analysis comprises several items which help us analyze the market, i will enumerate them, then i will start clarifying each separately:
1- Support & Resistance. 2- Trend lines. 3- Moving averages. 4- Fibonacci levels. 5- Indicators.
<<Support & Resistance>>
Before we know what is meant by support/resistance levels, we have to know how does the price form the tops and bottoms through its movement, as those which form support & resistance points, or lines or areas which are of great value in forex.
Definition of top
It is a candle which mediates 2 candles on each side provided that their price do not exceed the middle candle price / do not reach its high.
Definition of bottom
It is a candle which mediates 2 candles on each side provided that their price do not exceed the middle candle price / do not reach its low.
The following charts will clarify what i mean
From the previous bottoms and tops support and resistance lines are formed respectively.
How can we benefit from the support/resistance lines?
The price respects support/resistance lines as it closes to them, so if we detected an old support on our chart, and the price at the moment is moving towards it, we will wait until it tests it or just touch it, then we will enter with the direction of trend, the same happens with resistance but on the opposite side, let's see together:
N.B:- when the support line is broken it turns to resistance, and vice versa.
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