● Support and resistance

1.Support and resistance are elements that reflect human psychology without distinguishing between markets.

2.You may have seen that after the price rises to a certain level, the upward trend cannot continue and stagnates, while after falling, when it reaches a certain level, it stops falling and moves sideways.

3.This can be said to be a result of the principle of supply and demand being reflected.

4.The reason why the decline is limited when the price falls is because the buying force stimulates demand at a low price, and conversely, the selling force’s supply decreases.

5.This is because high prices encourage selling forces to increase supply, and conversely, buying forces purchase at high prices.

6.Simply put, if the price breaks through resistance with strong trading volume, resistance turns into support.

7.The stronger the resistance, the more difficult it is to break through, but if it breaks through, it will change into strong support.

● Support line

1.The support line is an area where, when the price falls to a certain level, the corresponding buying force appears strong and overwhelms the selling force.

2.In other words, the downward trend in price is supported near the support line, and the price movement changes to an upward trend or forms just above the support line.

● Resistance line

1.Resistance line refers to the market price level at which opposing selling forces can strongly overwhelm buying forces if the market price rises above that level.

2.In other words, the price upward trend is limited near the resistance line, and the price movement changes to a downward trend, or at least forms just below the resistance line.

*Why support and resistance are important*

1.Resistance or support lines can be used to find out at least how far the current price movement can go.

2.If the price movement fails to break through the support or resistance line, this can be a very important signal that the existing trend is changing.

3.The more recently a resistance or support line appears, the greater its importance. This is because the most recent price movements are likely to dominate future price movements.