Understand the support like the floor and the price like a ball.
Contrary to popular belief, the more a price touches support, the WEAKER it becomes.
I'm seeing lots of charts lately that make this mistake.
Here's a short thread why this is the case:
Price bounces at support because there are buyers willing to pay at that price.
Due to what's called "order absorption", each following support touch will usually have less and less buyers, eventually causing a shortage of buyers at a given price.
This is when price falls
An easy way to think of it:
Imagine a ball bouncing off the floor... With every bounce, it gets weaker and eventually stops bouncing.
Once it stops bouncing, the ball is no longer in motion, AKA the price will break through support
I'm seeing lots of charts lately that make this mistake.
Here's a short thread why this is the case:
Price bounces at support because there are buyers willing to pay at that price.
Due to what's called "order absorption", each following support touch will usually have less and less buyers, eventually causing a shortage of buyers at a given price.
This is when price falls
An easy way to think of it:
Imagine a ball bouncing off the floor... With every bounce, it gets weaker and eventually stops bouncing.
Once it stops bouncing, the ball is no longer in motion, AKA the price will break through support
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Wyłączenie odpowiedzialności
Informacje i publikacje przygotowane przez TradingView lub jego użytkowników, prezentowane na tej stronie, nie stanowią rekomendacji ani porad handlowych, inwestycyjnych i finansowych i nie powinny być w ten sposób traktowane ani wykorzystywane. Więcej informacji na ten temat znajdziesz w naszym Regulaminie.