š¹ Support & Resistance ā The Foundation of Every Chart
Support and resistance are two of the most important and widely used concepts in technical analysis. They help you understand where price is likely to stop, bounce, or reverse.
šø What is Support?
Support is a price level where demand is strong enough to stop a downtrend.
Buyers tend to enter the market at support, causing the price to bounce upward.
š¢ Example:
BTC drops to $58,000 multiple times but never breaks below it ā $58,000 is a support level.
šø What is Resistance?
Resistance is a price level where supply is strong enough to stop an uptrend.
Sellers appear at this level, often causing the price to fall.
š“ Example:
BTC rises to $63,000 many times but fails to break above ā $63,000 is a resistance level.
š How to Use Them in Trading:
Buy near support, sell near resistance.
Wait for breakouts or rejections at these levels.
Combine with candlestick patterns for stronger signals.
Support & resistance are not exact lines, but rather zones ā price might āpierceā them before reacting.
In Part 4, weāll learn how to draw trendlines and follow the direction of the market.
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