"Bear Markets have no support and Bull Markets have no resistance."
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Post Summary:
- Classic definitions of support and resistance
- A slightly simpler way of thinking about support and resistance
- In the attached links I walk through how to think about support and resistance in the dynamic environment of trading.
The classic definition of trading support refers to "a level that the price action of an asset has difficulty falling below over a specific period of time." Similarly, resistance refers to "a level that the price action of an asset has difficulty pushing above over a specific period of time." For basics explanation see Simple Trading Support & Resistance.
I say a slightly simplified way of thinking about support is a price where price is more likely than not to cease falling. Resistance is a price where evidence suggests that price will more than likely stop rising.
In the image at the top of this post, the floor would be considered support while the ceiling equals resistance.
I say a slightly simplified way of thinking about support is a price where price is more likely than not to cease falling. Resistance is a price where evidence suggests that price will more than likely stop rising.
In the image at the top of this post, the floor would be considered support while the ceiling equals resistance.
Support & Resistance Trading is the most pure form of price action and/or directional (long/short) trading available. It's also (in my opinion) the most profitable form of trading...when done correctly, of course.
Hope it helps.
Good trading.
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