$DEGO /USDT

Understanding Support and Resistance in Trading

Support and resistance are fundamental concepts in technical analysis that traders use to make informed decisions. Support refers to a price level where an asset tends to stop falling and may bounce back up. It's like a floor where buying interest is strong enough to prevent the price from declining further. Traders often see support as an opportunity to enter a trade, expecting prices to rise again.

On the other hand, resistance is a price level where an asset struggles to move higher and may reverse downwards. It acts as a ceiling, where selling pressure becomes dominant, making it difficult for prices to go beyond. Resistance levels can signal potential selling points for traders, especially if they expect prices to drop after hitting that level.

Traders use these levels to set entry and exit points, manage risk, and determine stop-loss orders. However, support and resistance levels can change. If a support level breaks, it can turn into resistance, and vice versa. These levels are identified using tools like trendlines, moving averages, or Fibonacci retracements.

Mastering support and resistance helps traders understand market behavior, making it a key strategy for both short-term and long-term trading success.

#BinanceLaunchpoolHMSTR #SECFilesAppealRipple #BitwiseFilesXRPETF #BTCUptober #EIGENonBinance