{"id":605,"date":"2008-08-01T01:19:55","date_gmt":"2008-08-01T05:19:55","guid":{"rendered":"http:\/\/club.ino.com:80\/trading\/?p=605"},"modified":"2010-02-19T17:29:11","modified_gmt":"2010-02-19T21:29:11","slug":"simple-yet-powerful-support-and-resistance","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2008\/08\/simple-yet-powerful-support-and-resistance\/","title":{"rendered":"Traders Toolbox: Support and resistance"},"content":{"rendered":"<p><a href=\"http:\/\/club.ino.com:80\/trading\/wp-content\/uploads\/2008\/06\/tradetools.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-459\" title=\"tradetools\" src=\"\/\/club.ino.com:80\/trading\/wp-content\/uploads\/2008\/06\/tradetools.jpg\" alt=\"\" width=\"136\" height=\"102\" \/><\/a>Although many of you will find this lesson in one of the most basic concepts of market behavior \"old hat\", it never hurts to review. One of the first things a new trader is told (I hesitate to say learns as many never do) is to buy a breakout above resistance and sell a fall through support.<\/p>\n<p>Resistance is the level which holds a market down, while support is an area which props up a market  much like a ceiling and a floor. The key is to identify the critical levels. There are a number of methods to determine support and resistance: trendlines, moving averages, retracements, Gann angles, etc. However, simple observation can be an effective means of locating the important areas. A quick glance at the October cotton chart reveals the most basic levels of support and resistance (broken lines).<\/p>\n<p><a href=\"http:\/\/club.ino.com\/trading\/wp-content\/uploads\/2008\/07\/page-9-chart-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-606\" title=\"cotton chart\" src=\"\/\/club.ino.com\/trading\/wp-content\/uploads\/2008\/07\/page-9-chart-1.jpg\" alt=\"\" width=\"500\" height=\"278\" srcset=\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2008\/07\/page-9-chart-1.jpg 638w, https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2008\/07\/page-9-chart-1-300x167.jpg 300w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/p>\n<p>A previous high often provides resistance, while an earlier low tends to offer support. Support or resistance levels are not necessarily flat. For example, trendlines reveal areas of rising support or falling resistance. Also, when broken, uptrend lines offer a new level of rising resistance, while the opposite is true for downtrend lines. In fact, virtually any broken area of support will become resistance and vice versa. After breaking a level of support (or resistance), the market commonly comes back to test that level before resuming the downmove (upmove). This may be the single most effective method of locating low-risk entry points for trading purposes. This lesson may seem like wasted space to the experienced. However, it is amazing how often traders simply forget (or ignore) the power of basic support and resistance levels. This concept can be very profitable, but it may be just too \"easy\".<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Although many of you will find this lesson in one of the most basic concepts of market behavior \"old hat\", it never hurts to review. One of the first things a new trader is told (I hesitate to say learns as many never do) is to buy a breakout above resistance and sell a fall [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[102,96],"class_list":["post-605","post","type-post","status-publish","format-standard","hentry","category-trading-tips","tag-technical-analysis","tag-traders-toolbox"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Traders Toolbox: Support and resistance - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2008\/08\/simple-yet-powerful-support-and-resistance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Traders Toolbox: Support and resistance - INO.com Trader&#039;s Blog\" \/>\n<meta property=\"og:description\" content=\"Although many of you will find this lesson in one of the most basic concepts of market behavior &quot;old hat&quot;, it never hurts to review. 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