How to trade support and resistance
How to trade support and resistance
Now that you know the basics of how to trade support and resistance, it’s time to apply these basic but extremely useful technical tools in your trading.
The Bounce
As the name suggests, one method of trading support and resistance levels is right after the bounce.
Many retail crypto traders make the error of setting their orders directly on support and resistance levels and then just waiting for their trade to materialize.
Sure, this may work at times but this kind of trading method assumes that a support or resistance level will hold without price actually getting there yet.
When playing the bounce, we want to tilt the odds in our favor and find some sort of confirmation that the support or resistance will hold.
For example, instead of simply buying right off the bat, we want to wait for it to bounce off support before entering.
The Break
In a perfect world, support and resistance levels would hold forever.
The Aggressive Way
The keyword here is convincing because we only want to enter when the price passes through a significant support or resistance level with ease.
The Conservative Way
As you would’ve guessed, taking advantage of this phenomenon is all about being patient.
