Support & Resistances for Trading

Its very basic but very important for trading........

Stock market is all about demand and supply for a stock which is reflected in the share price of that company as Supports and resistances.

These are important levels at which point supply and demand exist predominantly. In the real market place, prices are moved by excessive supply (at resistances) and demand (at supports). Support & resistances form integral part of price trend following.

In the good old times, traders remember two most simple points from where good amount of buying(support) emerged as well as sellers (resistance) appeared. They have kept only these two points of a particular time frame(short term- for intraday and medium term for positional) and carry out their trades. The moment a support or resistance points are exceeded significantly, they adjust themselves to the new development and change their resistances to supports in the case of a Break-out and vice versa.