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Tuesday, May 25, 2021

Explained Supports Resistors and Trend, Guide part 11

Explained Supports Resistors and Trend, Guide part 11

BTC/USD COINBASE:BTCUSD

Supports,Resistors and Trend

First of all say that all the forms of Supports and Resistances mentioned in this guide are based on my personal experience, there are several ways to really see it, but you can take it as you wish.

This topic is broad, and it is not based on the use of a tool, I consider that the tools are good enough to give you ideas, but it all depends on the psychological of both institutional and retail investors, points where they want to buy. Obvious points they want to get into. Knowing this, let's get started.

What is a Support?

Support is that psychological zone where retailers and institutions believe that the price would have a good maintenance of its price. (Shopping area).

What is a resistor?

Resistance is that area where retailers and institutions believe that the price will have a maximum peak to initiate a fall.

What are trends?

A trend is a movement, whether bullish or bearish , Side of the asset which we are reviewing. Identifying them is usually quite simple.

• Lateral Trend: Range Zone between a Maximum and Minimum price.
Bullish Trend: Bullish zone marking new highs of highs and lows.
Bearish Trends: Corrective Zone marking new resistance and lower lows.

Trends:

1- Bullish trend:

This is an upward trend, quite obvious, in this type of trend the price tends to make new highs and mark higher lows. As long as it does not break the trend we could join it looking for new highs.

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Example:

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NDAQ , 04 Mar 2021, Bullish .

2- Bearish Trend:

The downtrend tends to seek higher lows, it is also easy to identify on the chart.

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Example:

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BTC , 1 week Chart.

3- Lateral Tendency:

It is usually an area in which the price is in a range.

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BTC , 31 Jul 2020 to 03 Sep, Start Bearish Trend .

Already handling these concepts let's go to topics of Supports and Resistances a little clearer.

False Trend Breaks:

1- GAP:
A gap is an empty space. This empty space can be explained as follows:

What is a gap?

A gap is called a gap in the continuity of the price line with respect to time. It occurs when the price experiences a marked movement up or down without any operations between the previous price and the current price.

Gaps occur for various reasons, from market buying and selling pressures to important publications of economic data that cause a temporary lack of liquidity, not being able to complete transactions in a certain price range. In this way the price jumps from one security to another without going through the intermediate prices. The most frequent gaps in the forex market are due to the publication of key economic indicators and more usually to weekend events. However, gaps are relatively rare in forex compared to other financial markets where they can occur on a daily basis. This is mainly due to the large volume and continuous hours of the forex market.

Definition Copied, but this is a GAP. It can occur after the close of the stock market. And since BTC is already in these in part of Futures we could say that GAP could happen on weekends. Or when there is a lack of liquidity or a sharp upward movement after the closing of CME .

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Example Gap:

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BTC1! , CME , Close. And Open. Is GAP.

2- Rupture V:

The Break in V in a trend could indicate a possible change in trend, but there is always the possibility that "Pullback" attempt to change the trend does not work and that the trend will continue. That is why we do not usually enter the pullback, if not after it, hoping to get rid of the trend.

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Example V:

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It should be added that these 2 things can continue to be a continuation of the trend or an attempt to change. Although there may also be a breakout. The common thing is to wait for Pullback, and enter there.

Supports and Resistances in trends.

1- Bearish Trend

Basic rules:

• The trend is bearish .
• We do not enter Long, we look for a Short in the trend, resistance points, resistance placed in Blue CIRCLES. We can see the supports in the red dots, and we can visualize a Pullback trying to take it higher but being rejected by the bears. We always seek to enter the blue points. Never go against the trend. Seek to go with her.

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Example:

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Tip: Do not enter a trend when it is ending.

2- Bullish Trend

Basic rules:

• The trend is bullish .
• We seek to enter Long, At the support points, As we see there is a bearish pullback being rejected and led to the upside. The red points are resistances, and the blue points would be entries in Support. Green is the pullback. Always go along with the trend.

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Example:

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Tip: Do not enter a trend when it is ending.

Example:

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First of all we see a very clear resistance, support. And we see that when it touched support, a bullish happened.

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Where was the R1 now it became a support that when tested had a magnificent bullish

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Then the strongest resistance. It becomes a nice support. That when tested starts a bullish .

3- Lateral Tendency

Lateral Tendency
In a lateral trend, both resistances and supports are possible entries, here you can make your own decision of where to enter depending on where you think the price continues to go.

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Here we can see that this time I have not placed it so easily, it is simple, a trend in graphics is not like the drawings, you must learn to identify them, and this is done with practice, this trend is lateral, it has small trends within it. trend. We could say that in chart 1d the trend is bearish , but in monthly chart it is still bullish , this is what I mean.

Applying what has been learned:
As we can see in the image we see the 3 trends.


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1- Bullish trend .

As we can see, the blue dots are entry areas. And the red dots would be resistances, applying the rule that we will only seek to enter within the trend. In addition to visualizing an attempt to bring the price down that is rejected being driven up.

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2- Lateral Tendency.

We already know that this trend is a side zone in a price range to make a decision. So knowing this, what we will do is look for entry areas. As we can see, I still do not consider the first R3 as an entry since it is still within the uptrend zone, but I take into account the consequent lateral zones.

Here a hedge mode could be applied, prioritizing a Short or Long depending on the current market situation.

An example is that the market is bearish , so we would seek to open a Short first and then open a Long to have a Hedge mode and make a decision as to where this lateral channel breaks.

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3- Bearish trend


Here we can see that the Lateral channel broke down. So if we use Hedge mode (Open Long and Short in the same asset that is hedge mode).

We would be looking to confirm that a pullback to the upside is rejected to the downside, to close our long and let the short run. Thus obtaining profits from our hedge mode.

Finally as we can see, we end up with similar resistances and supports. That it will not always be fulfilled. But it is a way to get out. It is clear that there are other ways to identify support and resistance .

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Let's talk about those other ways ...

Fixed Supports and Resistors

Fixed levels are support and resistance zones that remain unchanged. They are still valid at the same level, unless the price breaks through it.

In order to identify fixed support and resistance levels, you should pay attention to:

Psychological price levels

vAnnual highs and lows
•Candlestick highs and lows
•Opening and closing of candles

Psychological levels of resistance and support

Most novice traders tend to rely on round numbers, numbers that place buy and sell orders being too exact. Here is a problem. Since the institutional ones are aware of this point of view including traders with more experiences and can make that the price does not touch those round numbers. These numbers are considered Psychological Numbers. Where inexperienced people usually decide to enter, being too obvious and therefore may:

•You have a short, your round stop touches, and it goes to the Bajada.
•You have an order in Short or Long, do not touch it and it goes to the direction you thought
•Touch your liquidation and it goes up.
•You have Long, touch your round stop touch, and it goes up.

Dynamic supports and resistors

Dynamic levels are areas of support and resistance that change. Don't worry if you don't know how to identify those new support and resistance levels, every time a new bar or candle appears on the chart, that zone is automatically recalculated.

Moving averages:


As we can see, the moving averages help you see possible rebound areas, which are changing and vary according to time periods and where the price goes in real time.

We can see that moving averages of 20, 50, 100 and 200 days are mostly used.

Here we can see an example of rebounds when touching the 50-day moving average, and we see that BTC is breaking them with the idea of ​​a possible support in the 200-day moving average.

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As we can see in CryptoGoUp Triple EMA says that the moving average is at the level of 42056 dollars. Being a possible support area . That is why many traders often use moving averages as testing areas to determine the direction of the price together with the use of indicators.

2- Parabolic SAR

SAR is an indicator widely used by some traders to see dynamic support zones. Here we can visualize it.

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Sar is easy to use, as we can see it places points where a new trend appears, the first points being the resistance zone . And the same in case an uptrend starts.

Semi-dynamic supports and resistors

Semi-dynamic support and resistance levels are between the fixed and dynamic levels.

While the dynamic levels of Forex support and resistance are changing and updating and the fixed levels remain constant, the semi-dynamic levels change at a constant rate.

A perfect example of a semi-dynamic support and resistance level is the trend line , which changes at a fixed rate per candle.

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Other Tools:


Fibonacci:


We could also use Fibonacci but this topic will be personally touched on in another Tradingview explaining all the tools that the platform offers us using Fibonacci.

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We are using fib retracement projection, it usually exceeds the levels of 1.23-1.618 in cryptocurrencies with high demand. And as possible maximum peaks it usually takes the levels of 2.23-2.618. This doesn't always happen, but personally it works quite well for me.

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Although it should be added that it depends on where you place it, if you place the retracement or projection from another point, this could be totally different, so for this, I prefer to use Objects and you get the best probabilities according to how the fundamentals in global economics go in general.

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If we wanted to measure a setback, it is the same. Mostly it touches 38-61.8%. Although being liquid coins it touches the 50% levels. Known as psychological zones.
As we can see when changing 3d graph. and placing the fib retracement from the start of the uptrend from 2020 at 4400 we are touching 50%. Therefore you should know where to place it, or in the best case, try.

Pivot Points:

Also Pivot Points , which places us different supports and resistances of each drop and rise that occurred. But it does not indicate possible areas of exact shape.

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We will see all these things mentioned in a telegraph by topic. I want to touch them in depth, but here you can get an idea of how to start.
Remember to follow me.

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