Thread by @_AsthaTrade

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Everyone uses Support and Resistance but rarely one uses it correctly.

A 🧵to help you master the S&R concept.

#NiftyFifty #NiftyBank #StockMarket

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Support: A price level where a security tends to stop falling, indicating strong buying interest.

Resistance: A price level where a security tends to stop rising, indicating strong selling interest.

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How to draw S/R?
There should be multiple touch points from that level

If that level is round no. like 100/500/800/1000 then it establishes that it is a strong S/R level.

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Historical Relevance:

Prior highs and lows, especially those tested multiple times, often serve as strong support or resistance levels.

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Trendlines also tend to be very effective S&R especially when the market is trending.

This is bcoz a stock while in trend forms HH &HL/LH &LL and the price respects these levels forming a trendline.

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When a support is broken it becomes resitence and vice versa.

This is because of market memory and trader psychology

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Zones:
Instead of a precise line, consider support and resistance as zones.

Prices might pierce a level slightly before reversing, so give some leeway.

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Time Frame:

S&R levels on longer TF (e.g. daily, weekly) are more effective than those on shorter TF (e.g. 5 mins).

Contd..

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