How to analyze the market to gain profits by understanding support and resistance levels!
Hello brothers, recently many of you have reached out to me saying, 'Brother Black Horse, you analyze the market accurately, but there are many professional terms we don't understand, leading us to miss opportunities or make wrong trades.' Today, I will simplify things and explain them clearly to you.
Normal market trends consist of support and resistance levels. When it reaches a resistance level, it will retreat; when it reaches a support level, it will bounce back. This is what we see today in the distorted price chart.
What is a resistance level?
When a market trend rises to a certain level, there will be a lot of sell orders, preventing further upward movement and forming a resistance level. This is akin to levels in a game: first resistance level, second resistance level, third resistance level. Breaking through the first resistance level indicates strength, and the market will continue to rise. As it approaches the second and third resistance levels, the momentum will weaken, similar to how a person running needs to rest. The market will also experience retracements. These resistance levels are also where we can sell long positions or buy short positions. So, brothers, you can use the resistance levels I provided to decide on your long positions or short positions. If you don't know where to short or where to sell your long positions, just refer to the resistance levels I analyze and provide daily.
For example: If Bitcoin stabilizes at 82000 today, it will make a four-hour rebound. The resistance levels above are 85000 and 85500. These two levels are our selling points for long positions and buying points for short positions. If it breaks through these two prices, we just exit manually and wait at the next resistance level. Remember not to hold on stubbornly. If it breaks through, it indicates strength from the bulls, and there's no benefit in holding on.
What is a support level?
When a market drops to a certain level, there will be a lot of buy orders, preventing further decline and forming a support point, known as a support level. Support levels, like resistance levels, have first, second, and third support levels. Each support level will generally see a bounce. If it directly breaks through, it indicates strength, and the market will continue to fall. As it approaches the second and third support levels, the downward momentum will gradually weaken. We can try to take a long position at the support levels for a bounce. These support levels are also where we can sell short or buy long positions. So, brothers, you can combine the support levels I provided with your trades. If you don't know where to go long or short, just look at the support levels I analyze daily.
For example: If the asset can't stabilize at 1800, it will continue to fall, testing the support levels below: 1750 and 1700. These two levels are also our selling points for short positions and buying points for long positions. If it breaks below, we just exit manually and wait at the next support level. Contracts are essentially about small investments for large returns, testing and finding the probability of success. There’s no absolute success; as long as we exit when we make a mistake, that’s good. Avoid holding on stubbornly.
To summarize: For intraday trades, if there are no major news events, you can wait for long positions at the first support level or short positions at the first resistance level. As long as there’s a small retracement, profits can generally be realized. Those who want to be more cautious can wait for long or short positions at the second and third support and resistance levels.
Now that I’ve said this, don’t you brothers understand much better? In fact, the trades given by many teachers in the market are just shorts at resistance levels and longs at support levels, right? Why charge tuition fees? A few hundred for oil, just to be a pawn. I update you every morning and evening, isn’t that great? If you listen, why become a pawn?
Position management
Don’t just go all in without thinking. Many people understand the logic, but they get greedy and want to recover quickly. Human nature is hard to control. I can only say, regardless of how much leverage you use, keep your position control within 5%. You have a chance to recover. If you don’t control it, you won’t even have a chance to recover. Don’t just look at those who made hundreds of oil profits; it’s all nonsense. What’s the point of making money today and losing it tomorrow? They are all gamblers.
If there’s anything you brothers don’t understand, feel free to leave a message below. I will share everything I know without reservation. The market is vast, let’s play together. We aim to make money from the market, not to deceive you or cut you off first. If you like it, give a thumbs up 👍 and follow.
