NIFTY IS AT CRUCIAL LEVEL, Support Become Resistance Now
It is important to check swing lows and swing highs for analysing prices for short term trading, this concept of price which tells us that the support becomes resistance after breakdown, can be understood by this chart analysis.
But why this happens ?
See we often use this concept in our daily trading the logic behind such pattern and price behaviour lies in the crowd psychology when anyone buy a stock he sees the recent swing low and thinks that what if I bought here I would be sitting in a profit of this and that, he may also put a stop loss below the swing low. This is the most common think a trader does. Because he thinks prices should not trade below this low.
Swing highs or lows are those points where either buyers exhausted (in case of swing high) or sellers ( in case of swing lows) , so such price zone deeply affect the crowd decision making when price again trade at those levels, either buyer start leading over sellers or sellers punch out the buyers , these are turning points. That is why we see a sharp breakout or a sharp reversal.
We can benefit from such behaviour as we know something is going to happen so
1) keep an alert by using TradingView Alert
2) As you get an alert see price action on those zones, trading on such crucial spot results in a good risk to reward situation.
Note : Prices are random and sideways most of the time, if you have a way to filter those times where prices probably not behave randomly than it gave an edge over your trading.
But why this happens ?
See we often use this concept in our daily trading the logic behind such pattern and price behaviour lies in the crowd psychology when anyone buy a stock he sees the recent swing low and thinks that what if I bought here I would be sitting in a profit of this and that, he may also put a stop loss below the swing low. This is the most common think a trader does. Because he thinks prices should not trade below this low.
Swing highs or lows are those points where either buyers exhausted (in case of swing high) or sellers ( in case of swing lows) , so such price zone deeply affect the crowd decision making when price again trade at those levels, either buyer start leading over sellers or sellers punch out the buyers , these are turning points. That is why we see a sharp breakout or a sharp reversal.
We can benefit from such behaviour as we know something is going to happen so
1) keep an alert by using TradingView Alert
2) As you get an alert see price action on those zones, trading on such crucial spot results in a good risk to reward situation.
Note : Prices are random and sideways most of the time, if you have a way to filter those times where prices probably not behave randomly than it gave an edge over your trading.
Comment:
successfully exhausted the breakout opportunity , do you also find such opportunity comment below.
Trade closed manually:
captured complete move by this analysis
Trade closed: target reached
