Trading Paradigm

Train and Develop Professional-Level Trading Skills

  • ARTICLES
  • FREE COURSE
  • TOP RATED
    • #1 Mindset Course
      • 2ndSkies Trading
    • #1 Funding Program
      • Topstep Futures
    • #1 Futures Broker
      • Edge Clear
    • #1 Stock Newsfeed
      • Benzinga Pro
    • #1 Stock Screener
      • Finviz
    • Recommended Books
  • FAQ
  • TRUTH/REALITIES
    • The Fantasy Gap
    • Proper Expectations
    • Knowledge vs. Skills
    • Entertainment vs. Training
    • Trading vs. Gambling
  • MINDSET/PSYCHOLOGY
    • Natural Biases
    • The Mirror Concept
    • Self-Transformation
    • Failure is Feedback
    • More Mindset Articles
  • EDGE/EXPECTED VALUE
    • Market Methodology
    • Expected Value Formula
    • Asymmetric Risk-Reward
    • Trade Tracking & Review
    • More Edge Articles
  • FREE RESOURCES
  • FREE COURSE: TRADING SUCCESS FRAMEWORK → GET STARTED BECOMING A REAL TRADER

What is Support and Resistance?

June 10, 2016 By Matt Thomas Leave a Comment


Technical Analysis in the Stock Market:

In technical analysis, the support and resistance of a particular security are levels where the price will tend to stop and turn back the other way. These price levels are often denoted by multiple touches (or near touches) of the level without a breakthrough. For example, if a stock price falls to $2 multiple times within a certain timeframe, but continues to “bounce” off of that level, it would be considered strong support, especially if heavy buying volume comes in at that level. Conversely, if a stock prices rises to $5, but continues to “hit its head” and revert back down, that would be considered strong resistance, especially if heavy selling volume comes in at that level.

Many traders, especially those implementing short-term approaches like day and swing trading, utilize technical analysis for potential buy and sell areas. Before even entering a trade, individuals can map out their desired entry price, exit price, and stop loss based on the security’s historical performance. A popular resource for technical analysis is candlestick charts, which can track price-action and the force behind each move. If you boil it down to the core, candlestick charts are able to accurately track sentiment, which is the primary reason stocks move. Through technical analysis, if you can pinpoint market reversals and accurately predict a future move, you can take advantage of profitable opportunities in the market and grow your portfolio.

Related Post: What is The Candlestick Course? Master Technical Analysis With Steve Nison

Filed Under: The Daily Dose: Questions For Stock Traders Tagged With: Trading System Basics

TRADING SUCCESS FRAMEWORK (FREE COURSE)

SEARCH

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

TRADING SUCCESS FRAMEWORK (FREE COURSE)

SEARCH

#1 Beginner Learning Program

Thomas Kralow Trading Academy - University Grade Trading Education

Read Full Thomas Kralow Review

#1 Trading Psychology Course

2ndSkies Trading With Chris Capre

Read Full 2ndSkies Trading Review

#1 Funded Futures Trader Program

Topstep Trader - Top Funded Futures Trading Program

Read Full Topstep Trader Review

#1 Stock Market Newsfeed

Benzinga Pro - Top Rated Stock Market Newsfeed

Read Full Benzinga Pro Review

#1 Futures Brokerage Service

What is EdgeClear - Is it the Best Broker to Trade Futures With?

Read Full Edge Clear Review

#1 Stock Screener Tool

Finviz and Finviz Elite - Top Rated Stock Screener

Read Full Finviz Elite Review

Risk Disclaimer||Affiliate Disclosure||Privacy Policy||Site Map||Contact||About