SUPPORT & RESISTANCE
HYPEDTRADER
Definition
Support is a price level or just a "line" where a downtrend or down move can be expected to pause due to a rise of demand or buying interest. As the price of assets or securities drops, the demand for the shares increases, thus forming a line which has a potential of holding the price and making it rise or bounce back again.
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Resistance is a price level or just a "line" where a uptrend or up move can be expected to pause due to a rise of supply or selling interest. As the price of assets or securities rises, the supply for the shares increases, thus forming a line which has a potential of holding the price and making it fall or bounce back again.
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​Trade the “Bounce”
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Buy when the price falls towards support.
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Sell when the price rises towards resistance.
Trade the “Break”
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Buy when the price breaks up through resistance.
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Sell when the price breaks down through support.
In The Video
When beginners are starting their trading journey they often stumble upon the terms Support and Resistance. Now, put all your doubts and partial information about S/R aside because here is the simplified explanation of S/R you've been looking for. S/R are nothing but lines which 'navigate' the market movements or 'support' and 'resist' them. Might be getting some questions in your mind innit? Let's narrow it down with a stupid example. Imagine yourself flying an R/C helicopter in the ground floor of a building with two floors. Now if you wish to fly it at a high altitude, how far up can it reach at max? The answer would be: as high as the ceiling of the ground floor. Here, the ceiling is serving a restriction to the helicopter's movement. Thereafter, if you wish to fly it back down, then the lowest it can get is the floor. Likewise, in a real time market, the upper movement of price is restricted by a line called 'Resistance' and the lower barrier for the same is 'Support'.​
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Now the significance of these levels in a market is that, these can help you get an idea about the point where the market price is gonna make a flip from. This would not only help in filtering out a precise entry, but would also help you detecting potential critical points from where market would bounce back into the opposite direction.
