To Deal with Resistance and Support

[RioBlemz]

Resistance are barriers and places where you encounter selling pressure which can lead to a reversal or a range before breakout. In the financial market resistance happens when the supply of currency, commodity, instrument, crypto etc. is higher than the demand.

Supports are places where you find buying interest. The inverse of Resistance.

Note: Support and Resistance are zones and not a point on a chart as some unprofessional thinks. Support is usually at the base whereas resistance at the top. For a newbie to get it correctly draw it along a trendline or spot turning point on the chart.

As we proceed I will bring few lessons to note.

LESSON 1: Resistance or Support Level may not hold due to the fact that the market is influence by other factors which revolves around economics, politics, natural disasters, wars, interest etc. So use resistance and support alongside other technical and fundamental tools.

The Best Time Frame to Draw Support or Resistance.

There are no best time to draw support and Resistance. Usually or most likely the market respond to Support or Resistance drawn with higher time frame.

LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style. Read the simple guide below;

Position traders usually use monthly and weekly chart to pin point, place or choose there zones.
Swing traders uses weekly and daily chart to pin point, place there zones.
Daily traders uses daily and hour times frames.
Scalpers has no rule, you become the rule.

Note: Trading is complicated and you need triggers.

To know the Strongest Support and Resistance

I present to you two school of thought; The first believes that ones a Resistant or Support has held more than two times that particular zone should be considered as strong.
The Second believes that ones a zone has been tried more than ones there is high possibility for it to give a way.

LESSON 3:  Always consider the pressure at which the price bounces back. It will tell you much of that zone. Whether the first school of thought or the second as mentioned above you need to know that conditions changes.

Feel free to add you input as there are many lessons to learn.

[1715023202]

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[palle11]

LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style. Read the simple guide below;

Position traders usually use monthly and weekly chart to pin point, place or choose there zones.
Swing traders uses weekly and daily chart to pin point, place there zones.
Daily traders uses daily and hour times frames.
Scalpers has no rule, you become the rule.

This could be correct in my analysis but sometimes it could also change depending on the formation of price action. For a daily trader, 15 minutes, 30minutes, 1 hour and 4 hours is most appropriate but a lesson has to be taken from a daily trading, all trades should be closed at the end of the day.

LESSON 3:  Always consider the pressure at which the price bounces back. It will tell you much of that zone. Whether the first school of thought or the second as mentioned above you need to know that conditions changes.

Feel free to add you input as there are many lessons to learn.

I was about to add that candlestick formation is also important to know if support or resistance would be broken, that is same force or pressure you are talking about. So with the chart on candlesticks, you can also use it to determine whether a tested support or resistance will give way or do a rebounce to continue reverse position.

[Johnyz]

LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style. Read the simple guide below;

Position traders usually use monthly and weekly chart to pin point, place or choose there zones.
Swing traders uses weekly and daily chart to pin point, place there zones.
Daily traders uses daily and hour times frames.
Scalpers has no rule, you become the rule.

Would like to highlight this one because as a trader you should have your own timeline and you do focus on that. One of the indicator of being a good trader is not to depend to anyone but of course to have your own trading strategy and you can easily set your trading goal once you already have this one. Well, the first thing that you need to do is to identify what kind of trader are you, usually the resistance and support level analysis works for the position traders as their timeline is longer and have more data to analyze.

[sheenshane]

Feel free to add you input as there are many lessons to learn.

There's no accurate result of support and resistance IMO, it will eventually break if there's enough buying or selling pressure.
So I think you need this last option to manage your risk and that's setting stop-loss orders to protect their positions in case these levels are breached.

I used this before and it seems it has a good result for me, it's a Bollinger Band.
If you're a day trader, it will identify the potential volatility levels and price reversals, possibly the upper and lower bands can act as intraday resistance and support levels, respectively, IMO.

[UchihaSarada]

At the same price or in a same price range, resistance and support will change its role with time. At some point of time, a price is a strong resistance but at another point of time, it will become a strong support.

To deal with resistances and supports, you must know it and in action you must not bind yourself with an idea like that resistance is strong and can not be broken out, that support is strong and price will not be dumped under it. If you have such controversial thinking and belief, you will make bad trading positions and if you use leverage, Futures trading, you will be liquidated.

[Husires]

LESSON 1: Resistance or Support Level may not hold due to the fact that the market is influence by other factors which revolves around economics, politics, natural disasters, wars, interest etc. So use resistance and support alongside other technical and fundamental tools.

resistance or support level may persist due to the psychological impact of prices. Traders influence the price, most of them try to take profits near the resistance level, where the bet is on a decline in the price and vice versa, and since the market sentiment is the same and there is not enough volume, the market will follow the same pattern.
We cannot ignore psychological factors when put resistance levels, in addition to the effect of averages.

LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style. Read the simple guide below;

It is a confirmatory measure alongside other measures and not a single measure, so setting the time frame is determined within your trading strategy.

[Hamza2424]

Note: Support and Resistance are zones and not a point on a chart as some unprofessional thinks. Support is usually at the base whereas resistance is at the top. For a newbie to get it correctly draw it along a trendline or spot turning point on the chart.

I would like to let these unprofessionals know that in charting or TA, we analyze our zone first and the zone cant be analyzed without proper support and resistance levels.

LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style. Read the simple guide below;

That's very much true but I would like to limit its boundary as support and resistance levels for Short time frame traders as 30 min or 15 min really don't provide as much assistance as for the longer time frames 4 hours 12 hours or 1 day. Choosing a longer time frame brings a lot of assistance in analyzing the market because there you have time to read and analyze maximum aspects of the market drow hold your position. On the time frame where you are bound with 30 min or 15 min, support and resistance continuously change due to the market volatility and nonavailability of the psychological ranges.

The rest of the points are sufficient enough to help out a newbie IMO, relatively  , usually its not style but I did liked it as a buddy above used it effictivly.

[RioBlemz]

Feel free to add you input as there are many lessons to learn.

There's no accurate result of support and resistance IMO, it will eventually break if there's enough buying or selling pressure.
So I think you need this last option to manage your risk and that's setting stop-loss orders to protect their positions in case these levels are breached.

I used this before and it seems it has a good result for me, it's a Bollinger Band.
If you're a day trader, it will identify the potential volatility levels and price reversals, possibly the upper and lower bands can act as intraday resistance and support levels, respectively, IMO.

You are correct on the point that there is no accurate result of support and resistance this is because of forces of demand and supply, economic determinant factors, policies, market interference etc. which has influence on the market.

Bolliger Band is a useful indicator that can give you a guide on Support and Resistance zone. I should advice that you don't just use Bolliger Band alone, use it along other tools for analysis. 

[jeraldskie11]

LESSON 1: Resistance or Support Level may not hold due to the fact that the market is influence by other factors which revolves around economics, politics, natural disasters, wars, interest etc. So use resistance and support alongside other technical and fundamental tools.

resistance or support level may persist due to the psychological impact of prices. Traders influence the price, most of them try to take profits near the resistance level, where the bet is on a decline in the price and vice versa, and since the market sentiment is the same and there is not enough volume, the market will follow the same pattern.
We cannot ignore psychological factors when put resistance levels, in addition to the effect of averages.

LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style. Read the simple guide below;

It is a confirmatory measure alongside other measures and not a single measure, so setting the time frame is determined within your trading strategy.

Personally, for execution we have different time frame that is effective to us base on the backtest we make. But to determine the strong SNR, you can only see them in the higher time frame. Meaning we must have the same plot of SNR when in terms of the higher time frame because it's really obvious. And also, we can confluence them to indicator to strengthen. If the majority of us have the same plotting of SNR, meaning we did it correctly.

[Beerwizzard]

That's very much true but I would like to limit its boundary as support and resistance levels for Short time frame traders as 30 min or 15 min really don't provide as much assistance as for the longer time frames 4 hours 12 hours or 1 day.

Indeed. This is why it is useful to use both larger and smaller timeframes. We can use 4h-1d timeframes to determine whether we are in a premium or discount zone and then switch to 15m-4h TF in order to find good entry and exit points.
This can be applied for pretty much all types of trading beside scalping on super low TF with low SLs and high leverages.

To deal with resistances and supports, you must know it and in action you must not bind yourself with an idea like that resistance is strong and can not be broken out, that support is strong and price will not be dumped under it. If you have such controversial thinking and belief, you will make bad trading positions and if you use leverage, Futures trading, you will be liquidated.

You can use Volume Profile to determine the strength of the level. If it shows a significant amount of orders behind the level then it is obviously strong and it will be safer to put SL behind the massive block of orders.

[el kaka22]

This is certainly something that is like straight out of some book or something regarding trading. Things are not as black/white like this and you may end up with a different approach on the long term, this is why we need to be a lot more careful about it. I personally believe that the best thing to do in this situation would be making sure that you personally gain some experience while you are doing this, that would actually make some sense and I can understand the issue a lot better that way.

Without gaining any experience, you are going to just end up with something that would not make any sense and you shouldn't do that at all, reading is not the same as living in it, which is why it is going to cause some trouble for a lot of people.

[TheUltraElite]

The theory sounds simple but practically a lot more things come up. So try your hands at trading while you get this in your head. I suggest dummy trading to any newbie who might be reading this because that saves up your money and a lot of frustration but gives you good insight and a head start.

A support level would be built where many buyers are present, it is usually lower than the trading price and the resistance level would be built where a lot of sellers are present. As the price drops more difficult to cross support levels are found because people are ready to buy at discounted prices. Visualizing this concept is easier if you have first trading experience, so try it out.

[Aisha_jay]

Your breakdown of support and resistance levels is spot-on. I appreciate your emphasis on the dynamic nature of trading and the importance of considering external factors. Your insights have already added value to my trading approach, and I eagerly await more of your lessons and discussions. Indeed, trading sounds simple in theory, but as we both know, the practical side often brings unexpected challenges and nuances. It's a continuous learning journey. 👍

[Franctoshi]

There is no best time to draw support
LESSON 2: The best time frame to draw Resistance or Support Level is the time frame that is suitable to your trading pattern or style.

Generally, the higher times are considered to be the best to hold stronger, you can't compare the weekly and monthly support and resistance zones to a lower time frame.

Thereise no best time to draw support
To know the Strongest Support and Resistance

I present to you two school of thought; The first believes that ones a Resistant or Support has held more than two times that particular zone should be considered as strong.

The Second believes that ones a zone has been tried more than ones there is high possibility for it to give a way.

I tend to agree more with the second point “B”, let's use this scenario for instance, If you take a hammer and hit an object about 2 or 3 and above, does it become stronger or weaker?, the later is the answer it becomes weaker, the often time a price hits a support or resistance zone the weaker and more likely the zone is to be smashed.

[Hamza2424]

Your breakdown of support and resistance levels is spot-on. I appreciate your emphasis on the dynamic nature of trading and the importance of considering external factors. Your insights have already added value to my trading approach, and I eagerly await more of your lessons and discussions. Indeed, trading sounds simple in theory, but as we both know, the practical side often brings unexpected challenges and nuances. It's a continuous learning journey. 👍

Haha, You and me seem like buddy is too much isn't it we rather than you & me. For the rest yes it's a continuous learning journey, today you win you gain experience and learn something, tomorrow may you lose still you'll find something new, In the Bull rally or the Bear trend, In the hyped market sentiments or the consolidating market, there is always something to learn and practice because this domain is like Ocean.

Trading is like an ocean. The deeper you explore, the more new things you discover. So never stop learning, even in the hard times. The trading ocean is beautiful, but it also has its dangers. Stay alert, buddy!

[Bushdark]

Your breakdown of support and resistance levels is spot-on. I appreciate your emphasis on the dynamic nature of trading and the importance of considering external factors. Your insights have already added value to my trading approach, and I eagerly await more of your lessons and discussions. Indeed, trading sounds simple in theory, but as we both know, the practical side often brings unexpected challenges and nuances. It's a continuous learning journey. 👍

Haha, You and me seem like buddy is too much isn't it we rather than you & me. For the rest yes it's a continuous learning journey, today you win you gain experience and learn something, tomorrow may you lose still you'll find something new, In the Bull rally or the Bear trend, In the hyped market sentiments or the consolidating market, there is always something to learn and practice because this domain is like Ocean.

Trading is like an ocean. The deeper you explore, the more new things you discover. So never stop learning, even in the hard times. The trading ocean is beautiful, but it also has its dangers. Stay alert, buddy!

Trading is svery hard and some persons may look at it like it is one sided. Trading has some many things to learn and get yourself aquainted to or else one might miss it all. Trading support and resistance has a lot of things we need to put into consideration and we don't need to keep trading without some certain conditions.

 Just imagine someone that is trading support and resistance using the loyal time frame. It will never hold because if you look at the higher time, we can find out that the point where we think is support or resistance may never be and it may look like a fake out. There need to check for support and resistance using the higher time frame.

[2double0]

There are so many important things including higher highs, higher lows, lower highs, lower lows, daily high, daily low, POI (Point of interest), FVG (Fair value gap), BOS (Break of structure), any session opening and closing, and many others that are needed to be considered before getting into a trade. Resistance and support alone cannot help and be relied upon, because if a resistance is broken, it becomes support for the next session till it gets broken back down and vice versa for support. I hope these terms will help newbies to find about them and learn more to trade better in their trading journey.

[palle11]

 Just imagine someone that is trading support and resistance using the loyal time frame. It will never hold because if you look at the higher time, we can find out that the point where we think is support or resistance may never be and it may look like a fake out. There need to check for support and resistance using the higher time frame.

This depends on the type of trader we are. if you are a scalper then you may not be relying on long hours of support and resistance because a short time is important since you want to run out of the market almost as soon you have entered. A short time trader like a scalper and daily trader don't really need a longer time analysis to carry out his orders . Example, if I use 1 to 15 mins time to execute my trade orders then using then I may not needa longer time support and resistance for it.

[teosanru]

I would surely like to add one more thing here and that is volumes along these critical pivot points. If you add in the volumes data around these price points you can get greater affirmation as to which Support or resistance is really strong and which really is a weaker one. Accordingly you know how many times price may bounce on this. Also if moving average confluence on the same point as support or resistance that can also give greater confidence on this.

[GreatArkansas]

Resistance are barriers and places where you encounter selling pressure which can lead to a reversal or a range before breakout. In the financial market resistance happens when the supply of currency, commodity, instrument, crypto etc. is higher than the demand.

Supports are places where you find buying interest. The inverse of Resistance.
(....)

Exactly and that's why a lot of traders are having difficult even in just using supports and resistances.
Some are getting stopped from loss hunt just because of wrong placing or identifying of supports and resistances.

For me, it's extremely important to identify and using it even what kind of strategy you are using because it will help you the price level where you can see lot of liquidities and can help you to enter a better trade.