Hey folks! My friends ask me how to work with support and resistance zones. And I decided to write a few articles about it. It is the first part of the post about that theme.
One of the most important knowledge I use is identifying support and resistance levels. These zones on a chart give me a clear edge in developing a winning trading strategy.
Crypto Resistance Level Meaning:
Resistance levels indicate prices where selling pressure may stall an uptrend temporarily. Traders watch these levels for signs of breaking through, which could lead to further price increases.
Identifying Resistance Level:
To spot resistance levels, I analyze the price chart and connect previous price peaks with horizontal lines. Breaking through resistance often leads to a new support level forming.
A support level is a price that traders believe a cryptocurrency is unlikely to drop below. It's backed by strong demand and buying activity as traders see the asset as undervalued. This creates a floor, making it an attractive buying opportunity or a safe zone for holding.
Finding Support Level:
The easiest support levels to spot are those that have held in the past. Past data gives insights into potential future support. I also zoom out to look at the bigger picture, considering overall trends and historical price action.
Support and Resistance Trend Lines:
These are horizontal price levels drawn at previous market peaks and troughs. They help identify potential support and resistance levels for a cryptocurrency. I usually trade it in scalping.
How to draw support and demand levels? Here is the example
To sketch support and resistance zones, simply draw a horizontal line through each meaningful trough (support) or peak (resistance).
Draw these lines through the bar lows (for support) or bar highs (for resistance) or the closing price, as most traders eye the close. Stretch these lines into the past to see if earlier price drops halted at the same level.
What methods can you use for the day trading with levels?
I apply breakouts in a low-volume market and breakouts during high volatility. I also trade along inclined trend lines in line with the trend.
Want to learn more about working with levels? Write in the post below, and I'll tell you more about it! As always, I'll appreciate your subscription and likes.
One of the most important knowledge I use is identifying support and resistance levels. These zones on a chart give me a clear edge in developing a winning trading strategy.
Crypto Resistance Level Meaning:
Resistance levels indicate prices where selling pressure may stall an uptrend temporarily. Traders watch these levels for signs of breaking through, which could lead to further price increases.
Identifying Resistance Level:
To spot resistance levels, I analyze the price chart and connect previous price peaks with horizontal lines. Breaking through resistance often leads to a new support level forming.
A support level is a price that traders believe a cryptocurrency is unlikely to drop below. It's backed by strong demand and buying activity as traders see the asset as undervalued. This creates a floor, making it an attractive buying opportunity or a safe zone for holding.
Finding Support Level:
The easiest support levels to spot are those that have held in the past. Past data gives insights into potential future support. I also zoom out to look at the bigger picture, considering overall trends and historical price action.
Support and Resistance Trend Lines:
How to draw support and demand levels? Here is the example
To sketch support and resistance zones, simply draw a horizontal line through each meaningful trough (support) or peak (resistance).
Draw these lines through the bar lows (for support) or bar highs (for resistance) or the closing price, as most traders eye the close. Stretch these lines into the past to see if earlier price drops halted at the same level.
What methods can you use for the day trading with levels?
I apply breakouts in a low-volume market and breakouts during high volatility. I also trade along inclined trend lines in line with the trend.
Want to learn more about working with levels? Write in the post below, and I'll tell you more about it! As always, I'll appreciate your subscription and likes.
