• Support levels indicate where there will be a surplus of buyers.
• Resistance levels indicate where there will be a surplus of sellers.
1000 days ago, I started learning about Support & Resistance.
Here are 10 pointers from Support and Resistance that'll get you started in the next 3 mins: 🧵
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• Support levels indicate where there will be a surplus of buyers.
• Resistance levels indicate where there will be a surplus of sellers.
• When the price continues up again, the lowest point reached before it started back is now support.
• Support is the level at which demand is strong enough to absorb the supply.
• The price is likely to bounce back and moves up in the opposite direction.
• Support is a level where the demand from buyers is expected to be much higher than sellers.
• It is the opposite of a support level.
• It is a price point (ceiling) at which the stock price is not expected to rise any higher.
• Resistance is a price point at which there are more sellers than buyers in the market for a particular stock.
• When the price passes through resistance, thereafter erstwhile resistance could potentially become support.
• Similarly, when prices pass through the support, thereafter erstwhile support could become a resistance.
• The more times S/R is tested, the weaker it becomes.
• When a support or resistance level breaks, the strength of the follow-through move depends on how strongly the broken S/R had been holding.
• S/R logics can be used by bot breakout traders as well reversal traders.
• Buy when the price breaks up through resistance with recent swing low as the SL.
• Sell when the price breaks down through support with recent swing high as the SL.
• Buy when the price falls towards support.
• Sell when the price rises toward resistance.
• One thing to remember is that support and resistance levels are not exact numbers, they are always a zone.
• You won't be able to define S/R in the live market unless you practice in the past charts.
• To train your eyes, you need to practice this across different time frames, and then you bare eyes could finally spot them.
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POSITION SIZING
Sizing is the key, you'll make big money only if you own a significant size without compromising on risk.
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