Resistance - support has long been an indispensable tool for technical traders. But drawing and using Resistance - Support is still not very effective, especially for new traders who are still quite confused when drawing Resistance - Support.

Normally, when drawing Resistance - Support, we who are still not good at drawing Resistance - support will have the following problems;
  • Too many bottom peaks, so where to draw is correct. All drawing is too confusing.
  • There are resistances to support me to draw, the price will not react. The bottom peaks do not draw resistance, the price reacts. Why is so weird?
  • Some people point out a road, others advise people to become an area. Confused!
  • Draw the tailor the closing price, does it have to be accurate?
And there are many other problems because there are many brothers asking me that, temporarily not remembering, just remember where to mention it.

HOW IS RESISTANCE / SUPPORT Correct?

Resistance to the naked eye is recognizable, but that's when you've been trading for a long time, and when you first trade, you still have to consider a lot of things. Here are some resistance-support should have installed in your head so you can draw and use it more flexibly.
  • It must be determined that: Resistance - support is the place where supply or demand is concentrated. That is, more people are clamped and want to buy/sell there than in other regions. That's why those regions react to prices.
  • With the same idea as above, the big low peaks are meaningful troughs, and the resistance/support drawn from those bottom peaks is effective and can predict the top of the wave's bottom.
  • Resistance / Support is also defined at different levels depending on the timeframe.
To clarify these ideas there will be a few examples:


As you can see, not all bottom tops are drawn for months of resistance/support. The low peaks are too small for the price to pass so that it does not react at all.

How about this example?


Obviously, in this bearish wave, we cannot find pullback points at small bottom tops.

SMALL SMALLS IN THE BIG FRAME ARE RESISTANCE TO MEET MEANING IN SMALL FRAMEWORK

The small peaks in the above example are not useless guys, it's just unusable at the current frame but when we move to the smaller frame, the price reacts very well in those regions.

What does this idea help us? Answer: use for multi-timeframe analysis. Simply put, when you identify a resistance/support zone in the current frame, we should turn to a larger timeframe to find it. Not flawed, but effective.

AVOID EXTREMELY TRADING ZONES, FIND CLEARLY AREAS

A clear bottom will usually give us a decent support zone. For example:


Can you see, as in the picture above, from the left, the top is clear, when the breakout price is not too messy, the breakout is quite clear. Hence, this resistance in the future will be meaningful support. And above is the result.

The second example is the same thing.

So how is that not clear?

See the example below:


Resistance/support is not clear when price tests and breaks out too many times in a short period of time.

Obviously, in the above example, the price has cut back and forth many times when it hit resistance, neither up nor down. Finally, go up. Hence, in the future, it is no longer good support. You should re-evaluate the quality of such resistance/support.