![]() ![]() When price comes to the support level The longs are those traders who have already purchased contracts The shorts are those who have already committed themselves to the sell-side The uncommitted are those who have out of the market or remain undecided as to which side to enter. Reverse for support area Once the structure of market know, then find which phase the market is currently (accumulation or distribution or up or down) The Psychology of Support and Resistance To illustrate, lets divide the market participants into three categories the longs, the shorts, and the uncommitted. ![]() Traders saw no value above the swing high Hence, subsequently, when price moves close to or near or above a wing high, we must remember that traders saw no value in buying above that point previously.Īssuming that most traders have not changed their opinions, prices are unlikely to move above the swing high.Įffectively the swing high mark a price area that resists the market from moving up this is what we call a resistance area. This means that at that point in time, no one was willing to offer a price higher than the swing high. ![]() They represent momentary changed of demand and supply forces The bulls could not move the market above the swing high. What are support and resistance How to Trade with Support and Resistance The psychology behind support and resistance Support resistance level vs zone Types of support and resistance Multi time frame support and resistance Where support and resistance formed Strength of support and resistance When support and resistance break What are SUPPORT AND RESISTANCE SUPPORT Support, as the buying, actual or potential, sufficient in DEMAND to halt a downtrend in prices for an appreciable period.įair price for buyers and risk to reward is more RESISTANCE Resistance, as the selling, actual or potential, insufficient supply to keep prices from rising for a time, and possibly turn back its uptrend.įair price for sellers and risk to reward is more FLIPPING These price levels constantly switch their roles from support to resistance and from resistance to support.Ī former resistance, once it has been surpassed, becomes a support zone in a subsequent downtrend and old support, once it has been penetrated, becomes are resistance zone in a later advancing phase. ![]()
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January 2023
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