Support and Resistance Levels 🔍
What is a support level? 🛡️
- It is a zone where demand is strong enough to stop a decline and reverse the price upward
- Why it occurs:
- Previous lows
- Psychological levels ($100, $1000)
- Ascending trend lines
Support:
1. Horizontal level - price has bounced up several times
2. Trend line: through 2+ local lows
Resistance 🛑
- It is a zone where supply predominates, hindering growth and reversing the price downward
- Why it occurs:
Previous highs
Psychological levels
Descending trend lines
Finding it:
1. Horizontal level: where the price has bounced down
2. Trend line: through 2+ local highs
3. Indicators: Fibonacci, MA, Pivot Point
How to trade from levels? 🎯
If the price is at support 🟢
- Entry: buy (long)
- Stop-loss: just below the level
- Take-profit: closer to the next resistance
Price is at resistance 🔴
- Entry: sell (short)
- Stop-loss: just above the level
- Take-profit: closer to the next support
- Wait for confirmation: bounce with volume
- Remember fake breakouts: entry after retest
- Additional: RSI, volume, MACD
