Risk disclaimer: I am not a financial advisor, trading involves risk, trade at your own risk. I am not responsible for your profit and losses.
What is support?
A price points/levels that keeps the price from going down. Traders mark these with horizontal lines and called it support. Not much to add here this support lines can be a good entry point considering the many factors that comes with it.
What is resistance?
A price points/levels that keeps the price from going up. Traders mark these with horizontal lines and called it resistance line. Again these resistance lines can be a good selling opportunity with many factors that comes along with it.
Important charactaristics of SR lines:
SR Flip: Support and resistance lines flips when price breaks the lines. Broken support becomes resistance and broken resistance becomes support. This SR flips tends to be significant when a candle closes(more about this in upcoming lessons) in the price point.
Test and retests:
The more times these SR levels are tested the weaker they become. So as an entry point it makes sense to enter on the first time the broken resistance is tested as support. This does not mean that it cant be entered on the third or fourth retest, again entry and exit points is entirely dependent on the trader. Timeframes plays an important part in retest of SR structures, a retest on a lower time frame may not be visible on the higher time frame and tends to last for shorter term while a retest on the high time frame tends to last for a longer term trend on the lower time frame.
To conclude this teaching, for new traders to study and test out these lessons, consider practicing in a paper trading account provided for free on TradingView platform for real market data. If you enjoyed this lesson a tip of BTC is always appreciated here:
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