TRADING COURSE
Lesson 6
SUPPORTS and RESISTANCES - The "Floors and Ceilings" of Price
Welcome to one of the most practical lessons in trading! Today we will talk about Supports and Resistances, concepts that will help you anticipate where the price may react. Imagine them as the "floor" and "ceiling" between which the market moves.
What are they?
· SUPPORT: Area where buying pressure is strong enough to STOP a decline and make the price bounce back.
Visual: A "floor" that holds the price.
· RESISTANCE: Area where selling pressure is strong enough to STOP a rise and make the price retreat.
Visual: A "ceiling" that limits the advance.
How to identify them?
1. Previous highs and lows: Where the price has turned before.
2. Congestion zones: Where the price has moved sideways for a time.
3. Psychological levels: Round prices (e.g.: $100, $1,000).
Golden rule:
A support, once broken, can become a new resistance.
A resistance, once surpassed, can become a new support.
This is called "role reversal" and is key to your analysis.
✅ Practical advice:
Don't look for the exact price, look for ZONES. The market is not an exact science. Draw your levels in areas where you have seen at least two price reactions.
👇 EXERCISE:
Look at any chart (it can be BTC/USDT on Binance).
· Identify at least one recent SUPPORT ZONE.
· Identify at least one RESISTANCE ZONE.
Do you see how the price has reacted near those levels?
Next class: The MOST IMPORTANT protection tool - The STOP LOSS. Don't miss it!
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