Why Does Resistance Become Support And Vice Versa?

Hi,

Thanks a lot for the book named swing high ans swing low.

As far as my understanding of all your articles and the four books, now i am trying to analyse that what is going on behind the price chart, one thing i dont understand is, why a previous resistance becomes a support in a up trend and vice versa.

Here i am not refering to banks placing trades or taking profits. I am talking about an area come into existance out of the blue.

Why a support level becomes exactly a resistance level or vice versa.

Thank you.

My Response:

If you check this article I did a while ago, I think it’ll help you understand why support becomes resistance and vice versa much better…

In my opinion, support and resistance isn’t really that useful because you can never know for sure if the level you’ve marked is the correct support or resistance level in the market.

If you were 100% certain a support or resistance level you were looking at is the same support and resistance level all the other traders in the market are monitoring, then I think support and resistance levels, as a whole, would become a lot more useful.

You’d be able to assume some kind of reaction is definitely going to take place once the market reaches the level.

With support and resistance levels as they are currently, you never know if the level you’ve marked is going to cause a reaction because you don’t know if the level is being monitored by a large number of traders.

I’ll be doing some articles on support and resistance levels in the future…

I’ve been trying to find a way to draw them as zones instead of lines for a while now, but so far had no success. I’m still trying to determine which points to actually draw the zone from, i.e., high or low – open or close. Hopefully, I can figure something out and make support and resistance levels much more useful.

Have a great New Year,

PAN.

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