Advance Price Action Strategy | Support And Resistance [Part 04] | FOREX LEARNING



hello traders welcome back in the previous lecture you have learned about the basic characteristics of support and resistance level where a previous bottom acted as the support for a new bottom by preventing the price to go more down from where the price changes its direction and rises up on the same way a previous stop acted as the resistance for a new top level by preventing the price to go more up from where the price changes its direction to fall more down in summary you have learned that a previous bottom act as the support for a new bottom and prevent price to go more down on the same way a previous top level act as the resistance for the new top level to prevent the price to go more up but there are some situations when a previous resistance become the support and hence prevent the price to go more down as well as the previous support becomes the resistance to prevent the price to go more up that new thing might be sound a bit confusing but it will be clearer if I explain you the setup with example so let me first clarify this new topic about the support and resistance with the Illustrated example then I will show you the steps with the real price section chart so let's start at first we will talk about the resistance level which tend to act as the support on a price section chart whenever price goes up and then falls down by creating a new top level then that new top level becomes a resistance for the upcoming market price which prevent the price to break this zone and go more up and the bottom where the market loses the sellers as well as attract the buyers we call this as the support of debt market which prevent the price to break the zone and go more down but because the market does not stay in a certain range forever so sooner or later the price will break the resistance and go more up or will break this support and fall more down now let's say from the support on a market because of this strong buying pressure if the price break the resistance zone and go more up then the resistance will become the new support for the upcoming market price action that means if the price falls down from the top because of the selling pressure then that resistance will act here as the new support and hence will prevent the price to go more down so that resistance will work as the new support along with also being as the resistance level now notice that because the market has created a new top level so this new top level has become the new resistance by default and will try to prevent the price to go more up by breaking that level but let's say if the price can break this new resistance level too and go more up then this resistance level will also turn into a new support level for the upcoming market price action which will prevent the price to break this support level and fall more down so that's the basic concept of how a resistance act not only as a resistance but also as a support level now let's have a real chart example of these types of price action setup as you can see this is a 4-hour chart of Aussie dollar versus EOS donor here you will notice that these top are swing high of the market is by default a resistance level in this price action chart the main purpose of a resistance is to prevent the price to go more up by breaking the resistance level but as you can see this resistance level could not prevent the price to go up surprise rose up until it got rejected by another strong resistance level so in this chart price got rejected for at least three times to go more up by breaking this resistance zone every time price reached to this zone from the bottom the buying pressure became low and hence the selling pressure became stronger which is why price falls down from this resistance level for the second time when the price falls after the rejection price went down until the previous resistance level which prevents the price to go further down and hence the resistance here acted as the support level you will also notice that this support level has been respected by the market for at least one more time now again when the price rose up by finally breaking the next resistance which was a strong resistance for a long time has now became a support level for the next price action of the market which prevents the price to go more down since the selling pressure decreases as well as the buying pressure increases at the lower market price or more specifically at a strong support level so that's how a resistance level become a support on a price section chart and hence prevent the price to grow more down now let's discuss about the support level when it act as the resistance on a price section chart in a price action chart whenever the price falls down and then rise up from the bottom we call that bottom or swing low as a support for the upcoming market price that will prevent the price to go more down below that support level now if the price break the support level and fall more down then create a new bottom level which indicates the oversold zone then by default this new bottom will also become a support level for the upcoming price action which will prevent the price to go more down by breaking that support level now since the price broke the previous support level so that support level has now transformed into a new resistance for the upcoming market price so if the price rise up from the current bottom then that previous support level will now act as a resistance and hence will resist the price to go more up by breaking that resistance level now again if the price fall down after getting rejected by the resistance level and then break the current support level then this support level will also turn into a resistance for the upcoming market price and hence will prevent the price to rise more up by breaking that resistance level so that's how a support become a resistance on a price section chart now let me give you an example of the set up using real price action chart as you can see this is a day chart of Europe versus US dollar here you will notice that this support has been acted as the resistance for the second bullish really in this chart and then the next bottom our support has worked as the resistance for two of the next back-to-back bullish release in this price section chart so after the price falls down and break the first support level that support now has turned into a resistance for the next price action and hence prevented the price to rise furthermore up by breaking the resistance level so after the price getting rejected by this support which acted as the resistance price Falls way more down by breaking the next support level so that support became the next resistance for the upcoming price action on this chart then later price rose up for several times but could not break that resistance rather the price falls down after getting rejected by the resistance which primarily is a support on this price section chart so in summary every swing point either it's a swing high or swing low it can be a support or a resistance on a price section chart depending of its position on the market support and resistance are the demand and supply zones while a resistance will resist the price to go further up and a support will prevent the price to go further down a resistance will be turned into a support level by the time the price will go up by breaking that resistance level on the same way a support will be turned into a resistance level by the time the price will break their support level to take any appropriate trading decision by analyzing the support and resistance levels on a price action chart you don't need to analyze the very old support and resistance levels rather search the newer or recent support and resistance levels on your chart support and resistance levels older more than one year is quite useless unless you face a support resistance which has been remained strong or unbreakable for a quite long time so that's the end for now about the support and resistance level hope you guys enjoyed the lesson we'll see you in the next lecture till then have a nice day and good bye

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