๐ Lesson Four | Support and Resistance
๐ฏ Title
Learn how to identify the strongest buy and sell zones in the market
๐ What is Support?
๐ข Support is a price level where buyersโ interest increases, which may limit the downside and raise the likelihood of the price bouncing back.
๐ What is Resistance?
๐ด Resistance is a price level where sellersโ activity increases, which may limit the upside and raise the likelihood of the price pulling back.
๐ How do you draw them?
Look for the areas where the price has bounced more than once.
Donโt draw an exact lineโtreat it as a price zone.
The more times the level is tested, the more important it becomes.
โ ๏ธ Golden Rule
After resistance is broken through, it may turn into support. And after support is broken, it may turn into resistance.
โ Common Mistake
Entering a trade just because support or resistance is touched, without waiting for confirmation from price action or trading volume.
๐ฏ Practical Application
Open the BTC/USDT chart on the 1H timeframe, draw three support levels and three resistance levels, then watch how the price reacts to them.
โ Todayโs Question
If the price breaks through a resistance level and closes above it, what may resistance turn into?
๐ข Answer: It may turn into a support level
๐ฏ Title
Learn how to identify the strongest buy and sell zones in the market
๐ What is Support?
๐ข Support is a price level where buyersโ interest increases, which may limit the downside and raise the likelihood of the price bouncing back.
๐ What is Resistance?
๐ด Resistance is a price level where sellersโ activity increases, which may limit the upside and raise the likelihood of the price pulling back.
๐ How do you draw them?
Look for the areas where the price has bounced more than once.
Donโt draw an exact lineโtreat it as a price zone.
The more times the level is tested, the more important it becomes.
โ ๏ธ Golden Rule
After resistance is broken through, it may turn into support. And after support is broken, it may turn into resistance.
โ Common Mistake
Entering a trade just because support or resistance is touched, without waiting for confirmation from price action or trading volume.
๐ฏ Practical Application
Open the BTC/USDT chart on the 1H timeframe, draw three support levels and three resistance levels, then watch how the price reacts to them.
โ Todayโs Question
If the price breaks through a resistance level and closes above it, what may resistance turn into?
๐ข Answer: It may turn into a support level
