« Where Bears Reign. »
Traders,
Today’s commentary on resistance will mirror yesterday’s discussion on support. There is a lesson in this. If you understand one, you should easily understand the other. Resistance is support flipped on its head.
Resistance is an area where supply exceeds demand, where the balance of power shifts from buyers to sellers. Think of it as a ceiling. So which set of numbers reveals resistance?
1,2,3,4,5
1,2,3,2,1
It is, of course, the second. The number 3 is resistance, but it’s not apparent when prices rise from 1 to 2 and 2 to 3. Indeed, you need the downward move in price from 3 back to 2 before it’s confirmed that the ceiling is in.
Thus, we could say that resistance is a downward move in price.
Up, up, up is not resistance.
Up, up, down is resistance.
This is why all bearish triggers require a downward move in price. The most common technique involves selling when prices break below the previous day’s low.
Resistance is a zone and not one exact price to the penny. In that sense, it’s more like a net than a glass ceiling. Keep this in mind when placing stop losses on bear trades and analyzing if the ceiling is truly broken.
🛑 Upcoming Webinar – Technical Analysis 101: The Basics of Support and Resistance with Coach Matt Justice | January 31st, 2022 at 8:30 PM EST on YouTube
Join us to learn more about two simple, but powerful, concepts in Technical Analysis known as Support and Resistance. Support and resistance not only represent various price levels; they also represent supply and demand on a technical price chart. Traders use these levels for a variety of important reasons, and you should spend some time learning more about them to improve your understanding of these powerful concepts.
In this webinar you are going to learn:
✅ What is Support
✅ What is Resistance
✅ Demand as Support
✅ Supply as Resistance
✅ How Traders use Support and Resistance
✅ Pivot Point Analysis in Support and Resistance
✅ Examples of Support and Resistance
Click on the button below to go to YouTube and set a reminder so you won’t miss it when Coach Matt goes LIVE.
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Video of the day: Trading Concept Check: Technical Catalyst & Resistance
Technical Catalysts are agents for change in the price action and give technical traders a reason to buy or sell when they see the price change directions at or near technical catalyst price areas.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode where Coaches Gino Poore & Greg Holmes talked about Support & Resistance or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Trade Masters 7:00 PM EST
Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.
Trading Justice 460: Pete Thomas on the current Precious Metals market
In this episode, Pete Thomas joins Coach Matt for a discussion on the current state of the metals markets. Pete is one of the best analysts on the gold market, a 5-decade veteran trader of the markets, and an individual you want to learn from. Listen in to another great discussion between Matt and Pete.
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