[ Crypto Trading by Identifying Support and Resistance ]-Steemit Crypto Academy | S6W3 | Homework Post for @shemul21

Whenever I search on google how to earn in the crypto market? or how to earn in the share market? and after most of the blog's visits, I saw that they all mentioned that buy at the support level and selling at the resistance level. But after reading the professor's post I came to know that it's a very helpful technical tool to understand the market moves and helps us to set stop losses and targets for profitable trades.

Actually Resistance and Support both are the very simple things but lot of people confused because of lack of guidance. Let's dive into the topic of Resistance and Support .

As you saw in the above charts you will have a clear Idea about the support and resistance. First I will like to tell you all the above chart is of BTC/USDT pair and its 4h timeframe chart. In the above image, you will see a support line. This is the price where demand for the assets is more and because of that price is not going down below that price. And after the first bounce of price, we can call that minor support line but when the price bounces another time from that price level then we can identify that level as strong support.

Also in similar way resistance is work. On a certain level of price supply is more and that time financial assets are not able to cross that level and started going down. As you saw in the above chart you will see the price coming more than 2 times on resistance level and after that because of more supply price is falling down.

• Horizontal Support and Resistance

As you saw in the above screenshot you will clearly observe that When resistance break by the price then it will swap as support and formed the new resistance level above the previous resistance and when the price is falling down and breaks the support line then it will find new support below the previous support and previous support is treated as resistance. To find this type of support or resistance you need stronger technical analysis knowledge

• Sloping levels of Support and Resistance

Normally, This type of support and resistance will you found in an uptrend or in a downtrend. As the price will never go up directly or not collapse directly. Price always makes the pattern of higher high and higher lows while going upside and lower high and lower lows while going in downside.

As you saw in the above image you will observe that there is a pattern of higher lows and higher highs and that higher lows are creating one support line while going in an uptrend this support line helps to goes upside and whenever the price breaks that support line then price falling down.

As you saw in the above image you will be observed that while in a downtrend lower high always has some resistance and that selling pressure will make one resistance line. Once this resistance is broken then the price will start to go upside. This type of indication helps traders to make profitable trades.

• Dynamic Support and Resistance:

This type of support and resistance you will find using the moving average of 20,50 and 200. This moving average helps us to find the uptrend and downtrend also helps us to know to pull back and trend reversal.

As you saw in the above image you will observe that once the 20 MA is broken it shows that there is strong support and after breaking the 50 and 200 MA it clearly indicates for the long run and until the price is uptrend it takes the 200 MA as the support line once it is broken then it shows us the uptrend is over and there is some crucial fight between bear and bull trades.

A similar thing happens when the price is in a downtrend. Moving averages work as a resistance line. and when the price is above the moving averages that's the clear indication of a trend reversal.

We heard most of the time breakout words in the crypto world. But what is a breakout? Breakout is the situation of tremendous buying or selling pressure. Breakout is the position where traders can earn a huge amount of profit. A breakout occurs when the price is near the support level or near the resistance level.

In the above image, you can see the continuous breakout as the first price is below the moving averages, and later on, the price is taking a little bit of support but later on, that support is breaks and breakout happens.

In the above image, you observed that the price is falling and at some point, the price is taking support and breaking the resistance and changing the trend into the uptrend this type of breakout is called a reversal breakout.

Sometimes price action also plays the games with traders as sometimes price action shows that resistance or support level is broken and that time is for the breakout but that does not happen. As one example of the above chart, you saw that the resistance level is broken by the price but does not hold that momentum and starts falling down.

To get a more effective prediction of breakout it's best to combine the support and resistance with RSI and volume indicator. As if the support or resistance line is broken then we will check the RSI and volume indicator and get the confirmation of the breakout.

For example, as you saw in the above image price is breaks the resistance level and while that time also we saw a huge volume in the demand and also RSI bounces from its support level. It's a clear indication of the breakout and RSI and volume indicators help us to know the breakout. So the entry point in the above situation is for the BTC/USDT at the 38798 prices.

As I learned the support level and resistance in the post I applied that thing on my real trading account I saw the RSI is bouncing from its support level and also the price is taking the support of higher lows so I definitely know that above the resistance level is will break by the OMG/USDT. So I place the order for that. after some time I saw that my prediction is right as OMG is broke the resistance and swap it as support level and we all saw the good green candles of the breakout.

A false breakout is more harmful to the traders so many of the time prices of financial assets break the resistance or support level and that time because of its false breakout so many investors will stuck in their trades. So before jumping into the market with our own money we should have to confirmed by using the charts and volume indicator and RSI.
After getting the confirmation from the volume and RSI indicator we should have to take further steps.

To became successful in investment we should have to check the charts and identify the support and resistance level of the crypto coins. We should also have to use volume and RSI indicator for the confirmation of the trades. Using the support and resistance level for the trades will get more profits from the trades.