🔥 3 SIGNS THAT A LEVEL IS ABOUT TO BE BROKEN. SAVE THIS FOR LATER!
How do you know when a strong support or resistance level might fail on its next test?
Here are three scenarios I pay special attention to:
1️⃣ THE PRICE IS SLOWLY COMPRESSING TOWARD THE LEVEL.
Take a look at the first example. The price approaches the level but barely bounces off it. At the same time, each successive high is higher than the previous one, and trading volume is gradually increasing.
This may indicate that buyers continue to push against resistance. The probability of a breakout is rising.
2️⃣ A STRONG IMPULSE TOWARD THE LEVEL.
In the second case, the price approaches the level several times and bounces off it. It seems like the level is holding up very well.
Then a sharp move toward it occurs: large candles, elevated volume, with almost no pauses.
This is a sign of strong pressure on the level.
If buyers or sellers maintain their initiative, a breakout could happen on the very next test.
3️⃣ THE PRICE STARTS TRADING DIRECTLY AT THE LEVEL.
Here we see virtually no pronounced bounces. The price keeps returning to the exact same area, and volume remains high.
The level stops producing its previous reaction. In this situation, it is worth keeping a close eye on a breakout and confirmation beyond the range boundary.
❗️Important: Not a single one of these signs guarantees a 100% breakout. If buyers or sellers maintain their initiative, a breakout could happen on the very next test. These are clues that help gauge the pressure on a level. I always wait for confirmation and factor in the possibility of a false breakout.
📌 Save the image so you don't lose track of these three scenarios.
How do you know when a strong support or resistance level might fail on its next test?
Here are three scenarios I pay special attention to:
1️⃣ THE PRICE IS SLOWLY COMPRESSING TOWARD THE LEVEL.
Take a look at the first example. The price approaches the level but barely bounces off it. At the same time, each successive high is higher than the previous one, and trading volume is gradually increasing.
This may indicate that buyers continue to push against resistance. The probability of a breakout is rising.
2️⃣ A STRONG IMPULSE TOWARD THE LEVEL.
In the second case, the price approaches the level several times and bounces off it. It seems like the level is holding up very well.
Then a sharp move toward it occurs: large candles, elevated volume, with almost no pauses.
This is a sign of strong pressure on the level.
If buyers or sellers maintain their initiative, a breakout could happen on the very next test.
3️⃣ THE PRICE STARTS TRADING DIRECTLY AT THE LEVEL.
Here we see virtually no pronounced bounces. The price keeps returning to the exact same area, and volume remains high.
The level stops producing its previous reaction. In this situation, it is worth keeping a close eye on a breakout and confirmation beyond the range boundary.
❗️Important: Not a single one of these signs guarantees a 100% breakout. If buyers or sellers maintain their initiative, a breakout could happen on the very next test. These are clues that help gauge the pressure on a level. I always wait for confirmation and factor in the possibility of a false breakout.
📌 Save the image so you don't lose track of these three scenarios.
