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Finding Entry- and Exit Points, Scenario 1: Achieving Equilibrium — Support- and Resistance Levels

Generally, a profitable entry point is one with ultimate support or resistance, which investors will use to buy or sell and gain certain monetary benefit. Therefore, to find support and resistance becomes a vital issue in market trading. Based on J-Chart's philosophy, the calculated Balance Points are meaningful support and resistance levels (short-, mid- and long-term) which can be easily identified with the flexible ways of data combination provided by the program.

Using support and resistance is one way to determine entry and exit points. It refers to the principle "Market participation, when the market is undergoing the process of obtaining equilibrium". In this situation we enter and trade "against the market" within the boundaries of the actual equilibrium. Furthermore, using Balance Points as support and resistance is also one way of pursuing your risk management control.

According to your trading habit (cycle), you might want to look for different levels of support and resistance. The following 3 examples show the identification of short, mid and long-term levels using different settings for historical trading days and data combination.

Identification of support and resistance I

Identification of support and resistance II

Identification of support and resistance III

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.