Trading made Simple #3 - Support and Resistance
What's the best price to enter the trade?
To simplify...
- Support levels are prices that we feel that market won't go below
- Resistance levels are prices that we feel that market won't go above
Support and Resistance levels are considered floor and ceiling in the market. These levels are the zones where we make decisions whether to enter the market or cash out and take the profit.
So when to enter the market or take the profit? That's when psychology comes in to play and we patiently look at the market as it approaching those levels.
Support
- enter at support level
- take your profit at support level if you have been short
Resistance
- short at resistance level
- take profit at resistance level if you have been long
To better visualize support and resistance levels you can draw lines on your charts
What you need to look at are previous major highs and lows as these are most likely your support and resistance lines.They are easily spotted even for a beginner and don't require any specific tools. What's important is that they work because people tend to respond to them.
Let me know if this post was helpful and as always ....Happy Trading !!!
informative post. I'm learning slowly but surely.
everything takes time
I like the chart.
Excellent post for us newbies!
Great posts-serie! Upvoted and followed
Thanks, more on its way
Nice post!! I was thinking of making a post like this also. I had a friend of mine reading some of my posts and he kept asking me to explain.
Upvote and Resteemed!
thanks
Great series! Keep it up!
thanks ! will do
Nice beginner's article! Check out my posts if you're interested in technical analysis! Would love to see some practical examples of this applied to some of the cryptocurrencies out there on the market.