There are two type of support and resistance. Major and minor levels.
The reason this is important to understand is in placing a trade and deciding whether to keep a trade open or not.
Figure A.
This is USDCHF on the weekly timeframe.
I have identify a major level of support and resistance based on prices reaction. Typically I identify them on weekly timeframe or daily timeframe,
They help a me to anticipate changes in the direction of price.
This is important because one of the first reasons why trades lose is because of "Incorrect Direction" A trader thinks the markets going to go up and it went down and vice versa.
Identifying Major levels of support and resistance limits the chances of that happening
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