Let’s now look at charting and technical analysis. Next we will look at: Support and Resistance. PLEASE SUPPORT US BY LIKING THIS VIDEO IF YOU FOUND IT USEFUL
– What is Support and Resistance and why are they important?
Trend Lines
– What are Trend lines and why are they important
Key Levels
– What are key levels and how can we trade from them?
Time of Day
– Why is this important and what can we expect
Summary
- 📊 Support and Resistance Basics: Support occurs at levels where buying interest halts price decline, and resistance at levels where selling caps price gains.
- 🔁 Transition of Levels: Resistance can become support when broken and vice versa, reflecting market sentiment shifts.
- 🛠 Practical Usage: Marking key levels helps traders anticipate price reactions and frame trade setups.
- 🕒 Time Frame Relevance: Support and resistance are applicable across multiple time frames, from intraday to daily charts.
Understanding Support and Resistance
Support is a price level where buying pressure tends to overcome selling pressure, preventing the price from falling further. It represents an area where traders see value and are willing to buy, creating a floor for price action. On the other hand, resistance is a price level where selling pressure exceeds buying pressure, capping further price increases. Resistance acts as a ceiling, as sellers step in to prevent further gains.
Support and resistance are not precise lines but zones where market activity often shifts. Prices may test these levels multiple times, strengthening their significance. When a price breaches a resistance level, it often becomes a new support level, and vice versa. This phenomenon, known as a support-resistance flip, reflects changes in market sentiment.
