O'Reilly logo

7 Charting Tools for Spread Betting: A practical guide to making money from spread betting with technical analysis by Malcolm Pryor

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Tool 4 – Support and Resistance

Background and construction

Support and resistance in simple terms is shorthand for price levels where moves down or moves up have stopped in the past. The idea is not new. A hundred years ago books referred to such levels, even if they didn’t use the words support and resistance. The basic assumption the trader makes when placing trades using these levels is that if these levels have stopped price moves in the past they will do so again; and if they don’t the signal to exit should be clear.

Let’s look at a chart of the FTSE 100 from mid-2009. The chart shows an area of resistance and an area of support, which represent key areas in the continual struggle between the bulls and the bears.

Support and resistance ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required