Buy On Support Area

Practice session:

Exercise 1: Find the support level turned into resistance. Show exercise

Exercise 2: Find the support level turned into resistance. Show exercise

Exercise 3: Find the support level turned into resistance. Show exercise

Trading with support or resistance

Long positions can be entered with the help of support levels. 

The illustration below shows a support level has been established. 

When the price returns to this level, the price may rise again. 

New long positions can be entered with the help of support levels. 

The stop loss is placed below the support level. 

Number 1: Support level

Number 2: Price finds support at this level

Number 3: Long entry after this price level successfully holds as support

Number 4: Stop loss is placed below the support level

Nut Shell:

An overview of the lesson discussed so far….

At the support level, there are adequate buyers to stop the price from falling further and reverse the price to the upside.

At the resistance level, there are adequate sellers to stop the price from rising further and reverse the price to the downside.

Place horizontal lines on a chart where the price seems to stop repeatedly to find the support and resistance levels. 

When our approach is stable, we can use the wicks or the bodies of the candlesticks to draw support and resistance. 

Support can become resistance and resistance can become support.

We need to be careful to avoid false breakouts. 

The price may pretend to break through support or resistance, but will reverse again in the opposite direction.