In a simple sense to understand Support and Resistance is, "BUY at Support, SELL at Resistance".
⦁ Resistance is a Price Line that is very difficult for an ascending market to penetrate. Resistance is a price that is above the current price.
⦁ Support is a Price Line that is very difficult for a declining market to penetrate. Support is a price that is below the current price. For easier understanding, let's refer to the diagram below.
R - Resistance
S - Support
Look at the uptrend market when the price is going up, it is reflected on one price line and that is known as RESISTANCE.
Also look at the downtrend market, when the price is declining, it is reflected on one price line and that is known as SUPPORT.
But the prices at which the graph is reflected become as if a ladder to the ups and downs of the market. Resistance turns into Support (RBS) when the price of the graph rises past the Resistance Price Line. Support can also turn into Resistance when the graph price drops past the Support Price Line.
The Uptrend market is reflected on RBS before continuing to rise for a rebound on the next Resistance. In the Downtrend market, the graph is reflected on the Support line (S = "RBS"). This support line is formed as a result of the previous Uptrend market, namely Resistance Become Support (RBS). There are two RBS lines here. The downtrend market is also reflected in the Support Line which has turned into Resistance (SBR) before continuing to fall.
Reflected means Failed to Penetrate or failed to breakout.
The extent to which we can decide who Succeeded in Breaking or Failed to Break will be determined by the “Breakout” Factor.
Continue studying the next chapter.
