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Igor

Zone Of Support Definition

By Igor, in Trading Dictionary

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Igor    10

Igor
Posted

Support is rarely formed by a single price. It is more realistic to talk of a region of support or a zone of support, which is a price range which a downtrending price cannot get below. The zone of support exists because as the asset price goes down to that level, sellers exit their positions on the asset and buyers take over, stalling the continued downward move of that asset. These sellers do not all exit at the same price but rather within a tight range of prices, so the support area is a zone and not a single price level.

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