Support and Resistance

Support and Resistance is an important part of  Technical analysis. 

Let's discuss what is "Support"?

Support level is like a war where buyers wins against the sellers.

Support is a level where there is strong demand. Simply at support levels, buyers are in large numbers as compared to sellers. The logic behind this is that as the price goes lower it becomes cheaper which attracts more buyers to initiate their positions. By the time when that price is at support level, demand will overcome supply which means buyers win the war against sellers.

Let's take a look on recent Reliance industries chart:


There are the times when the price does not hold the support levels because of reducing number of buyers and that level fails. As more sellers comes to play and win the war against buyers price breaks the support level and starts to decline.After support level break, they can become the new future resistance level. Let's understand with the example.


Resistance

Resistance is an another war where sellers wins against the buyers.

Resistance is the opposite of support. It's the level at which the sellers are hesitant to continue buying as it's already expensive. As buyers become more weak, sellers comes into play and push the price lower forming a resistance level.

 


However, 

Resistance doesn't always hold like support. Resistance can be broken as buyers comes into play to push prices higher which turns current resistance level into support level. After that an another resistance level is formed and new sellers are established.


 So to sum up support and resistance, it's a never ending war between buyers and sellers. 

That's how the stock market works by giving chance to market participant to buy at lower level of support and then after some time to book profit or exit their trade at the level resistance.

So Folks, Start finding support and resistance levels on charts and practice it daily.

About Charting Software

Some of the trading partners which have best charting interface that I have used earlier like Zerodha, Fyers, Upstox, etc. But all these giants use Trading view as their base charts.

So You either you can find charts on your trading accounts or you can directly visit trading view.com  and then open your account.

If anyone having trouble regarding charts and trading account, you can contact me on Discord.

My Discord Server : Trading for Beginners

https://discord.gg/R5aypcEw

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