Many people don't know how to determine the bottom range. They often buy at the bottom halfway up the mountain, and then wait endlessly. After finally getting their money back, they hurriedly sell at the halfway up the mountain. There is almost no time to really enjoy the scenery at the top. In the long run, patience and passion are increasingly exhausted.
Yujie believes that this is because they have not mastered the ability to determine support and resistance levels. To master this ability, we must first understand how support and resistance are transformed into each other:
1. Support becomes resistance:
The support level means that a large number of buying orders flow into this position, and the buying orders are greater than the selling orders. The coin price will naturally stabilize at this position or above.
After the coin price has been running for a period of time, it finally falls below the support level and then gradually moves up, forming a U-shaped line trend, approaching the original support level step by step.
The large number of buying orders (locked orders) that appeared at the support level at the beginning finally waited until they could be untied, and they sold them one after another, and then they were untied. Therefore, to break through this original support level, it is necessary to use larger and more buying orders to impact and pull up the coin price.
This makes the original support level unconsciously converted into a resistance level.
2. Resistance becomes support:
First of all, you need to know that if you want to break through a certain strong resistance point, then there must be a lot of buying, and the more the better, so that the price of the currency can be continuously pushed up, breaking through the strong resistance point and reaching another height.
So when the currency breaks through the original resistance point and shows a parabolic run and falls back to the original resistance point again, the buying volume at that point is relatively large, and the dealer must sell a lot, and use time and space to finally break through the point.
This makes the original resistance point unconsciously converted into a strong support point.
Therefore, as long as a certain point that has been sideways for a long time in the early stage is found, then this point is a strong support point for the relatively low price of the currency, and a strong resistance point for the relatively high price of the currency. You will know how to buy the bottom and escape the top.
