What is Support and resistance Analysis? How to Analyze it and make profit step by step guide.

We are going to discus on some main topics like, What is support and resistance analysis? How to analyze them? How it Work? How to make profit by using Support and resistance? these are very important topics of chart analysis that you must need to remember because they also tell you where to place stop loss and take profit where to buy and sell your trade in many ways(Form).

Let’s first discus What is Support and resistance analysis is:

Support and resistance is one of the most important topic where you need to understand and find where coin price will move next.

in simple word you need to analyze, is coin price will stay still, fall back down or move upward or break the support or resistance.

What is Support:

Support is a level where price did not go down more and start moving upward direction.

in simple word it is a point where price start going up when ever it come to that point, that place become it’s support and if this happened many time on the past and present, that point will become strong support.

How Support Create:

There are many traders who are following the same rules of support and resistance and when coin price reach support many traders start buying coins, when many traders buy one coins it’s create demand and when demand increase price will automatically increase itself, this is how support create.

But remember support not always work as price bounce back(price go up)method, so use stop loss, because when support break people/traders start selling, there coins and market will start going down/dumping, so use stop loss when you enter market after analyzing support.

How You Can Make Profit using Support:

You can make good profit if you understand how support actually work, when will it break, when will it go again up and how you can do this?, is after analyze the current market situation, market news, coin stability and most important coin behavior like how it move in it’s past history when something like this happen( you need to see it’s past movement) because many traders follow them.

Let’s also put this as Example

There is coin name XYZ and it’s current price is 205$ and is making support at 200$ and it touch the 200$ 4 time and in past that coin XYZ make support at 100$, when price come to 100$ is go will go up and that happened 4 time but in fifth time it break the support and start going down(dump), so in current time there a high chance for that coin to break the support 5 time when it touch 200$.

You can make profit, when price reach support buy the coins and sell the coins when it reach resistance but as always use stop loss don’t loss your money without reason and be patience when you are trading.

What is Resistance:

Resistance is a level where price did not go up more and start moving downward direction.

In simple word resistance is a point when the price go up and when it reach the price it will start moving down, when price come down as it’s highest or at the same old high point, that place become resistance point.

How Resistance create:

Resistance create when many traders start selling there coins at high point or at the same old high point, and coin start going down, it happened because when many traders start selling there stocks/coins at the same time, the supply will increase and if there is no one or less person to demand that coin price will drop according to that, this is the reason how resistance made.

Many traders follow support and resistance rule so there will be many traders who are ready to buy or sell there coins when the price start to touch resistance.

And also remember resistance will not always work, some time price break resistance and when that happened the price will go up(the coin will pump) and may not come back again to that point shortly, so always use stop loss according to which coin you are trading.

How you can make profit using Resistance:

You can make good profit when you know how resistance work, What is it’s past behavior was, when will it go again down or up, these are some important thing that you need to focus if you want to make profit using resistance.

You can make profit when price go to support, buy coin and sell it when it reach resistance, there is also another way that many traders follow and that is when it break resistance, This method is very good if resistance is strong, because many traders also want to buy when the price break the resistance.

Example:

Let’s say there is a coin name XYZ

it’s current price is 10$.

Coin making it’s strong support at 9$ and strong resistance at 11$

if price go at 9$ you can buy it and sell it when it reach 11$

or you can buy it when it break it’s 11$ resistance.

When it break 11$ you can buy that coin and sell it according to your analysis.

That how you can make good profit using support and resistance.

How Traders Mostly Use Support and Resistance?

This is important for you to know how traders use support and resistance and buy coins, because if many traders buy or sell a coin then it’s price will move quickly.

• Traders buy when price go up from support( it’s buy time)
• Traders sell there coins when price reject to break resistance and come back down(it’s sell time)
• Traders sell there coin when price break support(it’s sell time)
• Traders buy coins when price break resistance(it’s buy time)

Is Support And Resistance Important?

Yes , support and resistance is very important, it tell you when will market go up or down it tell you strong and weak points of coin so you can buy it in right time, support and resistance tell you where to put stop loss and take profit, if you enter market when support is breaking you might make your trade in loss and if you close your trade when strong resistance is breaking you might loss more profit that you can make, so support and resistance is very important for traders to know.

This is all for now, successtradeinfo will teach you many more thing in future so stay with us here.

If you want to know what is chart analysis then click here.

If you want to know about what is risk management then click here.

If you want to know what is trading strategy then click here.

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