Everyone Should Know This: Supports and Resistence!

Support and resistance levels are key concepts that help investors navigate price movements. These levels are psychological and technical markers where a coin's price tends to slow down, reverse, or consolidate. Understanding them can make the difference between a successful trade and a missed opportunity.

What Are Supports and Resistances?
Support is a price level where demand for a cryptocurrency is strong enough to prevent further decline. Think of it as a floor where prices “bounce” upward.
Resistance is the opposite—a ceiling where selling pressure prevents the price from rising further.
These levels form due to the collective actions of traders. At support levels, buyers feel the price is low enough to enter the market. At resistance levels, sellers believe the price is high enough to secure profits.

Why Don’t They Last Forever?
Support and resistance levels are not permanent because market conditions, sentiment, and external factors are constantly changing.
These shifts happen because of supply and demand imbalances or significant events, such as news about regulations, technological upgrades, or changes in market sentiment.

Avoiding the Trap of Greed
Many traders make the mistake of placing their buy or sell orders right at these levels, aiming for maximum gain. However, this approach can be risky:

Support and resistance levels are zones, not fixed lines. A coin’s price might come close but not touch your order before reversing.
Missed opportunities: Waiting for the “perfect” entry point might result in missing a profitable trade by a few cents.
A wiser strategy is to avoid being too greedy:

Place buy orders slightly above support and sell orders slightly below resistance to improve the likelihood of execution.

The Big Picture
Support and resistance levels are tools—not guarantees. Successful traders view them as part of a broader strategy.
Support and ResistanceTrading PlanTrading Psychology

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