Ardis Spain tsAK
--
TRADING STRATEGY FOR BEGINNERS: Support, resistance, and market traps
Hello everyone!
Supports are levels where the price tends to stop and bounce upwards, while resistances are levels where the price finds a ceiling and retreats. Supports reflect attractive minimum prices for buyers, while resistances are levels where sellers take profits.
Identifying these zones can help us make better entries and exits. For example:
If the price touches a support, we could buy expecting a bounce upwards. If the price reaches a resistance, it would be time to sell before it drops.
However, if a support is broken, it is better to wait for the price to fall further before looking for an entry. Similarly, if a resistance is broken, we would wait for the price to rise a bit more before selling.
Market traps: false breakouts
The market can be deceptive, and one of the most common tricks is false breakouts. This happens when the price seems to exceed a support or resistance, but quickly reverses in the opposite direction.
For example, today I saw how the price broke a resistance with a high-volume green candle, giving the impression that it would continue to rise. However, the movement reversed and left trapped those who bought expecting a rise. This type of deception can force us to hold for a long time or exit without profits.
To avoid falling into these traps, it is essential to wait for a few more candles and confirm the movement before acting.
Conclusion
Identifying supports, resistances, and recognizing false breakouts is key to avoiding common mistakes in trading. I hope this information is useful to you, and if you're interested, in future articles I will delve deeper into these topics. Happy trading!
Hello everyone!
Supports are levels where the price tends to stop and bounce upwards, while resistances are levels where the price finds a ceiling and retreats. Supports reflect attractive minimum prices for buyers, while resistances are levels where sellers take profits.
Identifying these zones can help us make better entries and exits. For example:
If the price touches a support, we could buy expecting a bounce upwards. If the price reaches a resistance, it would be time to sell before it drops.
However, if a support is broken, it is better to wait for the price to fall further before looking for an entry. Similarly, if a resistance is broken, we would wait for the price to rise a bit more before selling.
Market traps: false breakouts
The market can be deceptive, and one of the most common tricks is false breakouts. This happens when the price seems to exceed a support or resistance, but quickly reverses in the opposite direction.
For example, today I saw how the price broke a resistance with a high-volume green candle, giving the impression that it would continue to rise. However, the movement reversed and left trapped those who bought expecting a rise. This type of deception can force us to hold for a long time or exit without profits.
To avoid falling into these traps, it is essential to wait for a few more candles and confirm the movement before acting.
Conclusion
Identifying supports, resistances, and recognizing false breakouts is key to avoiding common mistakes in trading. I hope this information is useful to you, and if you're interested, in future articles I will delve deeper into these topics. Happy trading!
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
194
0