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SNR Master 1

Master SNR

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43 views

SNR Master 1

Master SNR

Uploaded by

aratimunda20495
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SUPPORT & RESISTANCE ( MASTER 1 )

What Is Support?
In a downtrend, prices fall because there is an excess of supply over demand. The lower
prices go, the more attractive prices become to those waiting on the sidelines to buy the
shares. At some level, demand that would have been slowly increasing will rise to the level
where it matches supply. At this point, prices will stop falling. This is support.

Support can be a price level on the chart or a price zone. In any event, support is an area on
a price chart that shows buyers’ willingness to buy. It is at this level that demand will usually
overwhelm supply, causing the price decline to halt and reverse.
What Is Resistance?
Resistance is the opposite of support. Prices move up because there is more demand than
supply. As prices move higher, there will come a point when selling will overwhelm the
desire to buy. This happens for a variety of reasons. It could be that traders have
determined that prices are too high or have met their target. It could be the reluctance of
buyers to initiate new positions at such rich valuations. It could be for any other number of
reasons. But a technician will clearly see on a price chart a level at which supply begins to
overwhelm demand. This is resistance. Like support, it can be a level or a zone.

Once an area or “zone” of support or resistance has been identified, those price levels can
serve as potential entry or exit points because, as price reaches a point of previous support
or resistance, it will do one of two things: bounce back away from the support or resistance
level, or violate the price level and continue in its prior direction—until it hits the next
support or resistance level.

The timing of some trades is based on the belief that support and resistance zones will not
be broken. Whether the price is halted by or breaks through the support or resistance level,
traders can “bet” on the direction of price and can quickly determine if they are correct. If
the price moves in the wrong direction (breaks through prior support or resistance levels),
the position can be closed at a small loss. If the price moves in the right direction (respects
prior support or resistance levels), however, the move may be substantial.

The Basics
Support and resistance can be found in all charting time periods; daily, weekly, monthly.
Traders also find support and resistance in smaller time frames like one-minute and five-
minute charts. But the longer the time period, the more significant the support or
resistance. To identify support or resistance, you have to look back at the chart to find a
significant pause in a price decline or rise. Then look forward to see whether a price halts
and/or reverses as it approaches that level. As has been noted above, many experienced
traders will pay attention to past support or resistance levels and place traders in
anticipation of a future similar reaction at these levels.

Technical analysis is not an exact science, and sometimes price will dip below support levels
or reverse before it gets to the prior support level. The same is true for resistance: Price may
reverse before it gets to the prior resistance level or break above it. In each case, flexibility is
required in interpreting these chart patterns. This is why support and resistance levels are
sometimes referred to as zones.

There is nothing magical about these price levels. It is simply that many market participants
are acting off the same information and placing trades at similar levels.

MIDDLE SNR
Middle is as the name suggests, this position occupies a place between support and
resistance, it is opposite and can be called the midpoint of change. not all traders
understand about this middle point because it has many derivatives and is volatile. In short,
the Middle here can connect two points into one, so that it can be a reference for knowing
price direction. the advantage is that it is easily adaptable, it doesn't matter if the market is
bullish or bearish, it doesn't matter if the market is normal or the market crashes. The
drawback is that his character is easy to change, but there's no need to worry, this can be
overcome by following what he wants. For example, a bear market suddenly becomes a bull
market, we just need to change the Middle SNR as soon as possible.

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