In this video, we'll take a look at one of the most basic aspects of trading, and that is going to
be support and resistance.
So support and resistance is exactly what it sounds like.
It is support for price or resistance, the price.
So, for example, a place where price will drop below.
So that is support there as the market continues to find buyers in this general vicinity, just as this
was resistance, as the markets kept trying to break above there, but could not actually accomplish
that.
Now, support supported resistance tends to form at large round figures.
And as a result, you can use that to your advantage.
In order to do this on Trading View, you click on the line to the horizontal line tool and you just
place it right on the chart.
You can drag from the oval here.
And this brings up something a bit interesting.
So as you can see again, right, click this and go down to the settings, the coordinates.
I can make it to 40 even, and most of the time you will find that price tends to respect these round
numbers.
Like I said, now there is an area that has been supportive, a little bit of a range here, just below
240.
And as we broke higher in a theory, I'm on the daily chart, we finally plunged through it and it offered
resistance.
You quite often see that its market memory.
So what I use to illustrate this a lot of times will be the idea of a high rise.
So say you've got four floors here, floor one floor to floor three or four.
And if you take the stairs or the elevator up to the second floor, what was once the ceiling now becomes
your floor.
Just as if you drop from the fourth floor to the third floor, what was once your floor becomes the
ceiling, it's kind of the same thing in technical analysis, we go ahead and draw a couple of other
lines and you will see that as I draw these out.
It becomes apparent that this market, Ethereum seems to like these levels right around every 40 dollars
or so you can make an argument for these are areas you should be trading from.
Quite often what people will do is they'll look for support or resistance in the marketplace on higher
timeframes and then perhaps drill down to a lower timeframe to see how it behaves.
That's getting a little ahead of where we're at now.
But what this does suggest to you is that markets, in fact, are not random and they do have little
road map, kind of like posting signs.
You can think of it as opening up a map, seeing that there are directions, there are turns and twist
in the road.
Very similar here.
By simply drawing these four lines, you can see how different the market suddenly looks.
So, like I said, a lot of times they will tend to appear near a large round number.
So you can click on a horizontal tool, a horizontal line tool, and you can drag this bubble until
you find several places where price either does or doesn't go above or doesn't go below.
So, for example, you can see right here, there's obviously some trouble right around the.
Forty three dollars level and you can see that.
As Price kept trying to get there, it kept running into a lot of issues.
You can also make an argument for right around here.
This would be basically.
Eighty five dollars.
Again, that's around, that's a big figure, you know, you can quite often go into these markets and
like I said, you start to see a pattern.
So, for example, let's see what 75 has to say here.
And Litecoin, you can see 75 was someone important.
You can see several times where buyers and sellers came in.
There was resistance there.
There was support there.
There was resistance there, et cetera, et cetera.
You can begin to as you trade, Mark, as you can begin to kind of get a feel for what they they tend
to like.
OK, so Mikoyan here you can see 70 has had an effect on price.
So I'm going to take a wild guess and say that we're probably looking at about 15 dollar intervals or
so.
So let's try 55.
And again, it won't be perfect necessarily.
It never really is, but you can start to see that there is a pattern to this.
And if you really split hairs, you can talk about, you know, for example, maybe are we going to
be seeing, you know, five dollar increments?
Well, there's probably a reaction on a short enough time frame.
So you don't want to go crazy, which you want to see is something rather obvious.
And then you kind of put it around the round number typically.
So, for example, this is an area for me that I think shows support.
Several times resistance, several times, it's basically sixty five dollars.
I could also make an argument about the 50 dollars level.
You can see certainly there are several reactions in the next video, we're going to talk about another
type of support and resistance based upon Fibonacci.