1. "Last peak reached by the price after breakthrough":
- The peak: is the highest price reached by the asset (such as a currency or stock) during a specified time period.
- Breakthrough: when the price exceeds a resistance level (a price ceiling that was previously difficult to surpass).
- Example:
If the price of the currency fluctuates around $10, then rises to $11 and closes above it, this indicates a breakthrough of resistance and may signal the beginning of an upward trend.
2. "Support Area":
- It is the price level where buyers gather strongly to stop the decline, leading to a price bounce upwards.
- Example:
If the price of the currency drops to $8 and bounces several times, then $8 is considered a strong support area.
3. "Strongest area to enter a rise":
- It is the point where strong technical signals appear to start an upward trend, such as:
- Breakthrough resistance with volume confirmation.
- Price bouncing from a support area while forming a bullish candle (such as a hammer candle).
- Example:
After the price bounces from the $8 support with increased trading volume, this might be the best buying opportunity.
4. "Last Bottom Price Description":
- The bottom: is the lowest price reached by the asset during a time period.
- Price description: Analyze the price movement around this bottom to understand whether it signals a reversal or a continuation of the decline.
- Example:
If a bottom forms at $7 with a long lower shadow candle, this may indicate that buyers have started to enter strongly.
How do these elements relate to each other?
1. After the price breaks through the $10 resistance (last peak), traders look for a new support area (such as $9) to support the upward trend.
2. If the price bounces from this area with strong buy signals (such as high trading volume), this point becomes the strongest area to enter a rise.
3. Monitoring the last bottom (such as $7) helps confirm the strength of the trend and avoid false breakouts.
Advice for beginners:
- ✅ Always ensure the price closes above resistance or below support before making a decision.
- ⚠️ Use stop-loss orders to protect your capital (Example: place a stop-loss below the support area).
- 📊 Learn to read candlestick patterns and simple indicators (such as moving averages) to improve your decisions.
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Summary:
Technical analysis relies on understanding how price interacts with support and resistance levels, testing peaks and bottoms. Patience and discipline are the keys to success! 🚀
