Dynamic Levels : basic information???
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When it comes to the support and resistance the crucial word in all of this is, in fact, dynamic. The main reason for that is the fact that dynamic support and resistance levels are different from the traditional and more present horizontal lines.
These dynamic levels keep changing very often because they are depending on the most recent price movement. In this regard, many traders from all over the world are considering moving averages as the crucial and most important support and resistance levels. Those trades that use moving averages as support and resistance levels actually buy Call binary options in the situation when the price plummets down while they buy Put binary options when the prices are skyrocketing and when it reaches the levels of moving averages.
However, there is one aspect that traders should always keep in mind. They are very similar to normal support and the lines of resistance. However, what they need to keep in mind is the fact that the price whose changes starts the process, do not always behave as traders expect. Often they often do not reach the levels of the moving average. Sometimes those prices actually go little high before they actually return to the main trend of the prices. However, from time to time, those prices break such resistance and because of that traders often buy Calls and Puts only in the moments when the prices reach the middle levels of the gap that appear between two resistance lines. This gap is often called the zone and it can be seen from a lot of research, the prices often rise only to decline after a short period of time which is totally expected with these kinds of notions.
It often occurs that many traders use different strategies for intraday trading. These strategies are more than often based on the observation that moving averages just like the horizontal support and lines of resistance as well as their intersection should be considered as a zone that requires special attention. The region that appears between these moving averages can actually be used as a support and as an area of resistance.
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