How to cleverly use support levels for trading?
(1) In an upward trend, during the pullback process, if the bearish candlestick is weaker than the previous bullish candlestick, especially when close to the support price level, and trading volume shrinks, then a bullish candlestick quickly engulfs the bearish candlestick, leading to a rise in coin price. This is an effective support.
(2) In an upward trend, during the pullback process, if bearish candlesticks frequently appear and selling pressure increases, even if there is a slight rebound near the support line, the buying power is weak, and the coin price will eventually break below the support line, indicating a market reversal.
(3) A consolidation forms near the support line, and after a period of consolidation, a long bullish candlestick appears, indicating that the support line is naturally effective.
(4) A consolidation forms near the support line, but after the consolidation, a long bearish candlestick slides below the support line. Investors rush to exit to minimize losses, and the coin price will continue to decline for a while.
(5) If the coin price breaks down below the support line, it indicates that the market trend will shift from an upward trend to a downward trend. Generally speaking, in a major upward trend, if a medium-term downward trend appears and breaks below the support line of that medium-term downward trend, it indicates that the major upward trend has ended; in a medium-term upward trend, if a minor downward trend appears and breaks below the support line of that minor downward trend, it indicates that the medium-term upward trend has ended, and the coin price will continue to decline as per the original downward major trend.
(6) If the coin price approaches the support line from above but fails to reach or just touches the support level before reversing upward, if there is significant trading volume accompanying this, then when a downward adjustment occurs again, one can buy in to obtain rebound profits.
(7) If the price breaks below the support line from above, and if there is significant trading volume accompanying this, it indicates the formation of another downward phase. One should sell at the slightest rebound to avoid greater losses.
(8) If the coin price approaches the support line from above, although it has not broken below it, but there is no accompanying trading volume, it suggests that there is no possibility of a rebound, and one should exit early.