how does support and resistance levels work.

Suport and recistance is important to be able to trade. It provides levels on which you can make technical analyzes. So it is important to be able to do the levels well. In this blog we will teach you how it works, how to make it and how you can make money trading. In our example we use crypto trading with suport and recistance. That is why it is the Bitcoin chart that we are going to explain it with. Suport and resictance works on all digital assets that can be traded. At the end you can also participate with a crypto giveaway.

 

Why is support and resistance important?

Thanks to the support and resistance you can draw levels and make an analysis there. You cannot trade without levels. That is why understanding resistance and support is important. It's not hard to understand.

Maybe you can see how it works in the picture on the left. But every trader needs it. Otherwise you cannot trade. Thanks to levels you can also determine your stop loss and take profit and start earning money with support and resistance levels in 2022.

 

It is therefore important for the complete picture in crypto trading and without these support and resistance levels you can do nothing in the field of crypto trading.

The image on the right shows how it works. To enlarge it you can click on the image.

An example of support and resistance. in the Bitcoin chart. (BTC/USD)

What is support in trading?

Support are levels where the price is helped with support. In the example on the right you see an example of support levels.

Thanks to this support you can make an analysis for a long order and determine an entry with it.

If the price goes through the resistance and leans on the suport it can shoot up to the next level.

 

What is resistance in trading?

What is a resistance level in the chart. It's the same as a support level but at the top. If the price hits that, the price will fall again. So this is the level at the top of the range. Just like a support level, you can place a trade on it. The resistance is also an important level when trading. You can also use this to determine the entry, stop loss and take profit.

 

The difference between support and resistance in short.

So if you have read above you will find that the only difference between support and resistance changes the side where the price arrives. Resistance can also become support. If the price rises and goes back it is resistance, if the price falls and rises again it is a support level. This is briefly what is explained in the paragraph above.

 

How do you use support and resistance levels in crypto trading?

Now we come to the most important thing. Now we have briefly explained what support and resistance crypto trading is. Of course it can also be found with other digital assets that can be traded. But of course it's about making profitable trades. How do I trade on levels in the cryptomarket? We're going to explain that here. We are not going to talk about how trading works. You can also click here to go to a short free trading course. Levels are also explained there.

 

As you can see next to the example, the price always gets a support on the support level. (The bottom line.) And the price gets a resistance at the top level. (The resistance level.) When you see this price action you can take a number of trades there. For example, on the support level you can place an entry for a long order and a short order for the resistance level. A take profit is therefore easy to find if you look at the other level.

If the price breaks out here, it moves to the next price range. Suppose the crypto currency is going to rise out of this price range, then the old resistance becomes support in the next price range. There are also a number of patterns that have a lot to do with these levels. Click here to learn more about levels.

If the image is hard to see I can click on it to enlarge.

 

The price moves in a range between support and resistance.

An example of a short trade with levels in 2022

Below is an example of a short trade. Thanks to the levels you can easily spot trades. In the example, a take profit is also a stop loss. That's how you place the trade. You can see that the price has gone up and down several times here as well.

So the price is always in a range and you can always place a trade based on understanding the levels of resistance and support.

 

If it is not clear to you how the levels are found, we are happy to explain that to you.

 

How can I find levels in the chart?

A short order on the bitcoin chart example with levels.

Spotting levels is not difficult. We are happy to explain to you how to find a level. So we explain how to find support and resistance.

If you look at the chart you will see that the price is going back and forth. There are waves in it. That is the case with every chart. So it is the same with forex. At some points the price goes the other way, so it is because of the levels. In many places the price will change at the same price point. See the example opposite for a clear picture. It's easier to explain when you see the picture. If it is difficult to see, you can click on it to enlarge it.

 

As you can see in the image, a number of circles have been drawn. If the price stops several times, it is a level. Each color is a different level and the more times the prize touches the level, the stronger the level is. The levels are always formed from past price action. You can practice with it in a chart program to see if you can spot the levels well.

 

An example of how support and resistance work on the Bitcoin chart.

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