Forex Questions and Answers - FXAnswer

price zone in which a stock finds support and begins to trade upward once again. In technical analysis, support occurs not at a finite point, but in a zone. The "density" of the zone of support (how far the price can move down through it) depends on the volume of trading as the price approaches and enters the zone. The higher the volume of trading in the zone of support, the higher the point at which actual support will most likely occur.

by

certicex

1 year ago

It means support occurs in a price zone which is tested and depending on the volume and density of trading, how far the price moves down through the zone will be an important indicator for future attempts to pass through it.

by

fxpie

1 year ago

When price action has hit a constant level of support in a zone. Every time price action reaches this zone it finds support and price cannot break down

by

fuji022

1 year ago

A price zone in which a stock finds support and begins to trade upward once again. In technical analysis, support occurs not at a finite point, but in a zone. The "density" of the zone of support (how far the price can move down through it) depends on the volume of trading as the price approaches and enters the zone. The higher the volume of trading in the zone of support, the higher the point at which actual support will most likely occur.

As the price of a security falls toward a zone of support, it is a test: how far the price moves down through the zone will be an important indicator for future attempts to pass through it.

It is important to note that even though higher volume can raise the actual support point within the zone, the chance of the support zone being wiped out is also higher.

When trying to catch the bottom of a retracement, it is imperative that stop-loss orders be used.

Source(s):

http://stockformation.investopedia.com/terms/z/ zone-of-support.asp

by

Kingpin

1 year ago