Topic: what is the support zone ? (Read 264 times)

Read this and you will understand https://www.investopedia.com/terms/t/trendline.asp

Basically support and resistance zone is a trend line and there is other read about it  https://www.investopedia.com/terms/r/resistance.asp https://www.investopedia.com/terms/r/resistance.asp,

or Too Long Didnt Read "Support, or a support level, refers to the price level that an asset does not fall below for period of time."

Youtube can be helpful

A support zone is a price level at which demand for an asset is expected to be strong enough to halt or reverse a price decline. When the price drops to a support zone, many traders see this as a buying opportunity as they expect the price to start rising soon.
Once traders have identified a support zone, they can use it to make trading decisions. For example, they may place a buy order at the level of a support zone, or wait to see how the price will behave at that level before making a decision to buy or sell. In any case, the support zone is an important concept for traders as it helps them make trading decisions based on the analysis of price data.

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Could someone kindly correct me if I'm mistaken, but it seems that a significant amount of support stems from the historical data indicating the struggle of the coin's price to decrease drastically. Additionally, the price range often exhibits a considerable number of sell orders, influencing whether the coin's value moves upwards or downwards depending on the volume of orders at that particular price point.

I don't really get what you mean. We must know how to read the chart if want a high probability trade. Professional traders will always trades with analysing the market technically. It's very impossible for a traders to be profitable who don't know how to read chart.

Aside from that, Support/Resistance is purely technical. You have to look at the chart to see or to plot the support/resistance zone where it is possible for the price to go. Psychological trading, is mostly determined as your mindset in trading, that's why there's a recommendation to read a books for trading such as "Atomic Habits". It's very useful for executing a trade.
There's a high chance of winning a trade if you both know Technical Analysis and Psychology.

You don't particularly need to know how to read charts to know coin support. Charts are only one of the instruments, not a necessity. Support/resistance is purely psychological.

If you check a particular coin's prices regularly, you intuitively come to know support based on your past price observations. A good example is myself, I dunno how to read charts, but I regularly check prices of coins I'm interested in, and have made successful trades using it.

There's what we called strong support and strong resistance. You can easily plot this in higher time frame. This zone cannot be broken easily and it's need a lot of supply if it's in the support zone, a lot of demand as well if it's in resistance zone. There's also what we called weak resistance and weak support, you can see it in lower time frames. It can easily be broken unlike the strong ones. These doesn't mean that you must only trade in strong zones because weak zones are still tradable, you only need to know how to read candlesticks, and much better if you know volume indicator as well. However, weak zones, in my opinion, are riskier than strong zones.

In addition to the question asked by op, and with reference to this chart, there are strong and weak support zones in the market likewise to resistance, so not necessarily that if price approaches every support level it gonna reverse, No. But support you should pay very much attention is support in the three higher time frames, monthly, weekly and Daily.

To elaborate more on this for traders that are finding it a bit difficult to Identify a strong support zones possible of reversing the market, one very thing you should look out for is a break of structure, basically market starts creating of a higher highs and higher lows in the smaller time frame like the 1 minute or the 5 minutes frames, immediately after hitting the support zone you've mapped out, So it a good sign that the market wants to take a reverse and the support is respected.

Support and resistance are temporary ones. With time, a support can become a new resistance and a resistance can turn to be a new support. Those changes of support and resistance occur when a market has a break out or break down.

Support and resistance can be changed so you should never put all your capital at risk by believing that this support is like rock and won't be broken down or that resistance is very big and price won't be able to break out of it. Long squeeze and short squeeze will kill you if you have such belief.

Bitcoin Support and Resistance for dummies is a good guide to enlighten newbies about support and resistance.

Let's assume that the market is uptrend. The market makes higher highs and higher lows. The higher high is the resistance area, the higher low is the support area. If the price is close to either support or resistance, there is a high chance that the price action will bounce back because there is a lot of supply in resistance, and lot of demand in support.

However, if the market makes a new higher high, the prior high resistance will turn into a support.

A support zone is a price range on a chart where an asset has historically found support and bounced back up from. To identify a support zone, you would typically look for a price level where the asset has bounced up from multiple times in the past. This can be represented by a horizontal line drawn across the chart. However, it's important to keep in mind that support zones are not a guarantee of future price movements and should be used in conjunction with other technical and fundamental analysis tools.

Support zone as per traditional TA is the point from where market had done a reversal previously and after a resistance is broken it also become a support for the market. But these days this theory has been combined with volumes as well. So places where market got high volume as well those points actually are called support zones or demand zones but yes, basically it's a point which market should hold in a rally.

A price range on a chart where the price of an asset has historically found support is known as a support zone. Traders look for prospective buying opportunities in support zones since the price is expected to move back up from there. One where the price has made several bounces off is a stronger support area. To reduce their potential losses, traders can purchase the asset close to the support zone and set a stop-loss order slightly below it.

Support is only an area where traders have been trading for a considerable amount of time and where it was challenging to pass that price; if they break that resistance, the spot then serves as a support for traders after the price has reached another price or hit another resistance. Just remember that support in trading is an area where trading activity has frequently happened and it is always recommended to buy at that spot. You can readily recognize support on a candle chart, and traders will often follow both big and local supports. The major supports are what traders often follow, and they are typically observed in large time frames, whereas local supports are typically observed in small time frames, such as hours and days. These pictures can help you comprehend.

On the contrary, I don't agree to some of your allusion concerning what is being discussed as it relates to trading. I think if we are discussing support or resistant zone or level based on demand and supply, I think we are going to miss the point. Support simply means a point where there is traders taking decision to either enter or exit the market likewise for resistance level and so those areas are delicate to deal with because if you get it wrong, we may lose alot of money before reversion. For newbie understanding, it is to be taken this way. Sometimes support levels can be broken easily, may not be broken and causing a reversal which is when you see a long spiking candle.
There are different levels for support based on daily trader, scalper or swing trader and to look for support or resistant areas, the pivot calculator can help.

In simpliest form: the support zone is basically where the buyer resides and it is when the demand is increasing in the market. What do I mean by that? When the price hit the support zone, the probability of the price to bounce or to go up is really high because this is the area of the buyers. The psychology of the buyers will drastically change because they know that the price is cheap when it hit the support level. But don't get me wrong because trading is probability game so there are no sure that the price may bounce if it hit support. You should also be aware that the price is usually moving between support and resistance. The resistance is when the seller resides, it is where the supply increases. For sellers, they think that the price is now expensive and they think that it will now go down so they are selling in resistance level. Identifying support and resistance is hard when you are a beginner and it will take days or weeks for you to master plotting support and resistance levels but once you master it, you will immediately see a lot of opportunities in the market. One of the ways in order to make money in the market is by buying at the support level and selling at te resistance level. This strategy calls swin trading and you can easily make money by using the volatility of the market as you advantage.

Op you need to read more on support or support zone, is the same thing and whatever you understand from it or the clarity you have can be interpreted on the reverse for resistant or resistant zone. For support zone, there are basic things we should understand about support and they are:

1. Support is when price is dropping or you can talk of support zone when price is dropping or you can look for support zone when price is dropping. Resistance is opposite.

2. Support zone when finally broken turns to resistance zone because it now comes above price area.

3. Support zone when broken confirms selling trend based on your time frame.

4. Support zone for every trader may not be the same but trend is the same.

5. Support zone may not be broken down in days, weeks or months depending.

6. Support zone are very good spots for entry or taking profit.

7. Experienced or professional traders look out for support or resistant zones to enter or exit. In fact, they are happy when they are able to identify it and if the candlesticks correspond with other indicators based on their trading strategy, they go for the big kill. 

the support area can be seen when there is a ranging candle, moving up and down in one area. as a reference, this support area is market defense, if the candle is not broken, then it is possible that the price will reverse direction and if it is broken, the price will return down, and a trend continuation will occur. the smaller the time frame, the more areas of support that can be found and vice versa, so we must be wise in our eyes to determine it

You can understand the meaning of the support zone from the name itself, it's the zone where the price of Bitcoin has a support for the market. That means if the market was to crash, it's likely the price that the price of Bitcoin or any other cryptocurency would fall to and this usually happens that way because they're lots of buy orders waiting to be filled at that particular price.

To spot the support level you also have to understand the resistance level, resistance is all about the price where the market has a selling pressure from traders wanting to take profits. If Bitcoin price was to continue rising then the new support level will be $30k since that was the previous resistance before it crossed it just few days back.

The most common type of support is if say there is a high such as $20K back in 2017. When Bitcoin went to $20K in 2020, the $20K was known as resistance. Then when it broke it and tested it again it was know as support. Very common technical analysis.

Problem is it doesn’t always work like in the $20K example. It failed as resistance and failed later as support. This is why you need more tools to trade such as market sentiment and perhaps some order flows. Can’t do trading on technical analysis alone even on stocks.