Support and Resistance Levels Are Tricky.

One thing you should remember to note about support and resistance levels is that they are areas in which a predictable price response can be expected.

Support Levels

Support levels are areas where buying pressure is just enough to overcome selling pressure and halt or reverse a downtrend.

A strong support level is more likely to hold up even if the price breaks the support level and it provides traders a good buying opportunity.

Resistance Levels

Resistance levels are just like support levels but work oppositely.

They tend to halt or even reverse uptrends.

Resistance levels are areas in which selling pressure is just enough to overcome buying pressure and force prices back down.

Strong resistance levels are more likely to hold up even if the price temporarily breaks the resistance level, and it provides traders a good selling opportunity.

In the next section, we will dive deeper into fakeouts and discuss why we should trade them and how to profit from them.

It’s not enough to learn about breakout strategies because there will be times when breakouts FAIL. We have to know what to do in case of fakeouts.

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