The market movements are very interesting to follow. From time to time you will see a certain currency pair you are trading trying to break an invisible barrier to move further up or down. The invisible barrier is known as support or resistance in forex trading, and it is something you will see a lot as you trade more.
Support is basically the lower barrier preventing the forex pair to move further downwards. If you see several double-bottoms and the movement seems to hit a constant low point, then you are looking at a support level for the foreign currency pair. If the support level is broker, further downward movements are to be expected.
Resistance, on the other hand, is the upper barrier that a foreign currency pair must break in order for it to move further upwards. Just like the support level, you will see a lot of double-tops and reversals when the pair you are trading hits its support level.
So how can we determine support and resistance? There are advanced calculation methods that you can use to determine the support and resistance of a currency pair, but the easiest way to set support and resistance is by looking at the candlestick chart for the pair and looking for tops and bottoms. Once you have determined the support and resistance for the pair, you can look for support or resistance breaks and bank a lot of pips by making the right trade when that break on support or resistance happens.