Tron Fan Club| Support and Resistance Breakout in Trading| By @solexybaba |10% payout to the community account

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Hello to everyone here in this great community known as the Tron Fan Club hope we all are in good spirit. Today I welcome you all to a beautiful week and also to an interesting topic on trading that I am about to share with us all. must newbies here are novices in trading cryptocurrency and that is why I m taking my time to put down some interesting topics so that after reading them, it will improve their knowledge regarding the trading of cryptocurrency. today I will be talking about a wonderful topic that I have titled Support and Resistance in trading. This is a topic that you do not want to miss, so sit tight and relax while I drop my entry.

WHAT IS SUPPORT BREAKOUT?

Screenshot from Tradingview.com

Talking about support breakout in trading this refers to the point at which the market keeps showing lower lows. this is a result of the market getting to its past low, and eventually breaking the last lows that were marked already at the level of support. and this scenario is seen when two candles are noticed to be much lower than that of the past support level, and when this happens, a solid downtrend movement is soon to be noticed. with this, it will enable traders to be alert and make judicious use of the breakout to be ready in other to apprehend the trend as quickly as possible. this is when the necessary things are expected to be done. setting your stop loss at the previous support level, this is to take necessary measures should in any way the market get a new retracement or in cases as a false market breakout occurs.

WHAT IS RESISTANCE BREAKOUT?

Screenshot from Tradingview.com

Now in the case of a resistance breakout, this can be seen as the point in which the market arrives at its previous high and then breaks the last high that was marked as the level of resistance representing a higher high and this happens when we noticed two candlesticks higher than the last level of resistance. when this happens we rest assured of a new trend in the market will be noticed which is known as an uptrend. and as such existing traders can now make judicious use of this breakout opportunity to apprehend the trend quickly and then set their parameters, that is, set their stop loss at the previous resistance level peradventure things goes south, that is in case of any eventuality that will lead to a retracement in the market or cases like a false breakout.

It is important and gainful for one to identify the support and resistance level before executing a trade, as though it reduces the chances of losing your funds and as well increase your chances of making a profit in trading. predicting the market movement is essential in crypto trading and as such knowing when the market is about to pull out from a particular trend or when the market is about to get support is very vital.

SOME ADVANTAGES OF LOCATING THE SUPPORT AND RESISTANCE LEVEL BEFORE EXECUTING A TRADE

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Support and resistance level are very important when trading cryptocurrency, below are some importance of the support and resistance level.

• Support and resistance level enable traders to set a risk level while trading cryptocurrency. it helps in setting parameters like the risk ratio, take profit, and as well stop loss, and this is when a trader is executing a buy trade order.

• Support and resistance level helps traders to predict the next market trend movement in other to be confident enough and make our trade-in a solid manner in other to make profits.

• Support and resistance levels help traders to take advantage of the market, knowing the next move of the market will help the trader to actualize his parameters and wait for a favorable outcome in the market.

• Support and resistance levels enable the trader to minimize losses that are likely to occur when executing a trade peradventure the market goes the opposite direction.

Basic trend movement in the market is a result of the support and resistance level. it remains in a straight motion until a new market trend is expected to occur and then breaks the previous level. and when this happens it is expected that traders are being given an edge over the market thereby maintaining a perfect position in the prospect of a good profit during this period.

WHAT IS A MARKET FALSE BREAKOUT

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False breakout, can either be that of support or resistance and in the market trend, it refers to the point whereby after a breakout of the past support or resistance level and continue in that manner, the market then takes a new turn back to the previous level and on that note, we then see that the new trend that was soon to occur was a false one and this false breakout has led to great loses of traders fund, that is to the traders that executed a trade during the point the false breakout was seen.

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HOW CAN WE AVOID TRADING DURING A FALSE BREAKOUT

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During a support breakout, it is advisable to lay low for the time being, seeing that the trend is moving in your favor does not determine that it will continue in that manner. incidents are likely to occur and as such, it is recommended that we do not follow trends or dive into them immediately. we are expected to wait and see the outcome of the movement before taking a decision. it does not matter how many candlesticks a trader has sited after a breakout, things are likely to happen and this is cryptocurrency we are talking about. as traders, we are expected to lay low, calm, and read the market movement careful, know whether the breakout is a real or false one before any other thing follows.

Setting the necessary parameters is also important, and this is done by setting your stop loss at the past level of resistance, and this is done if only you executed your trade at the point f the breakout. with this choice of action, we are sure to limit the level of losses to be incurred eventually if the market goes south, when this happens we can now sell and limit great loss while in the early period of the false breakout.

CONCLUSION

Identifying the support and resistance breakout is very important, and also knowing a false breakout is necessary. traders are expected to stay calm and put, watch the market so closely and figure out the market trend before setting their necessary positions, this will help you escape a false breakout of the market that always results in huge losses of funds when the market moves to an unexpected direction. as a good trader, you do not jump into a trade because you have noticed a breakout in the market. always make sure that the market breakout is not a false one, this will save you from losing a huge amount of money in the market trade. see you in my next article.