What are Support and Resistance?

• Support: Price level where demand is strong enough to prevent further declines, attracting buyers. It is like a “floor” where the price tends to recover.

• Resistance: Price level where supply is strong enough to prevent further increases, attracting sellers. It is like a “ceiling” where the price tends to retreat.

• Importance of the Timeframe: The timeframe (1 hour, 4 hours, 1 day, 1 week, etc.) determines the relevance of the levels. Longer timeframes (such as 1 day or 1 week) identify more robust supports and resistances, while shorter timeframes (such as 1 hour) are useful for day trading but less reliable.