How To Use Support, Resistance and Traidng Ranges Like A Pro
What Is a Trading Range?
A trading range is a period where an asset fluctuates between high and low prices.
Upper limit acts as resistance, hindering further price increases.
Lower limit serves as support, preventing significant price declines.
When we say “range-bound” activity, this is what we referring to.
Breakouts and Breakdowns
Breaking through/falling below a trading range indicates momentum building.
Breakout: Price breaks above the range.
Breakdown: Price falls below the range.
There are no meaningful breakouts that are not supported by strong volume
Support and Resistance
Traders in a well-established range can buy near support and sell at resistance.
Consider confluence and signs for confirmation.
Volume is crucial for spotting continuation or reversals.
Many traders like to play the value areas of a range such as VAH/VAL and take profits on POC
Using Volume for Analysis
High sell-side volume near support may indicate an upcoming breakdown.
Define major support/resistance zones based on past reactions for safer entries.
Key Points about Support/Resistance
The more a S/R zone is tested, the higher the chance of a breakout/breakdown.
Once broken, a S/R level switches roles: resistance becomes support and vice versa.
Previous resistance acts as support during subsequent touches
