Support and Resistance Secrets [Hidden Secrets That Nobody Tells]

In this video I am going to be revealing the best ways of using support and resistance to assist you in making better trade decisions

But before we start, be sure to subscribe to our channel so that you don’t miss on any of our new videos. With that being said, lets get into today's video.

First. What is support and resistance?

Support and resistance are basically price levels that mark important turning points in a market. You can think of them as barriers that prevent the market to go in a certain direction.

A support is an area on that chart that prevents the market from falling below, or going downwards.

Similarly a resistance level is an area on the chart that prevents the price from pushing above or going upwards.

The question is, why do these levels work.

The answer is, basic human psychology.

Behind these charts, there are real traders like you and me. And all humans have greed and fear. These emotions of greed and fear is what makes support and resistance so powerful.

Let me explain. Lets say that you watched the price make this massive upmove. So, you think that the price is in an uptrend. The you see the price make this pullback. You decide that it is a good opportunity to buy here. So you buy the stock at this price.

As soon as you buy, the price tanks down. You realize that the trend has already changed, but, you are too afraid to vacate your position. The loss is too big. So, you wait for the price to make a small upmove, so that you can exit at a smaller loss.

Your patience is rewarded when the market makes an upmove right at your entry. Hence, you are now at a break even level. You thank god for the mercy and sell your position. Your sell order creates a selling pressure in the market, and the price drops. A lot of traders like you we trapped at this price. Therefore, when they sell their positions, we see a strong downmove in the market.

So this becomes a valid resistance level.

The same thing happens at a support level. The traders that sold here we trapped in a losing trade. Therefore, they exited their position here and created a buying pressure. Hence, the price went up, and this level became a support level.

Support and resistance are one of the foundations of technical analysis. So it becomes very essential to learn how to correctly plot these levels.

How do you identify support and resistance levels?

Видео Support and Resistance Secrets [Hidden Secrets That Nobody Tells] канала Trade Prime