Why exactly does previous support tend to become resistance? - Traders Hideout | futures io social day trading
futures io futures trading


Why exactly does previous support tend to become resistance?
Updated: Views / Replies:2,525 / 18
Created: by Nashville22 Attachments:1

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 1  
 
Thread Tools Search this Thread
 

Why exactly does previous support tend to become resistance?

  #11 (permalink)
Elite Member
Montreal, Canada
 
Futures Experience: Beginner
Platform: NinjaTrader, Multicharts
Favorite Futures: ES
 
Posts: 96 since Dec 2011
Thanks: 46 given, 84 received

Take a look here: Support and Resistance - ChartSchool - StockCharts.com

Support is the price level at which demand is thought to be strong enough to prevent the price from declining further. The logic dictates that as the price declines towards support and gets cheaper, buyers become more inclined to buy and sellers become less inclined to sell. By the time the price reaches the support level, it is believed that demand will overcome supply and prevent the price from falling below support.

Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The logic dictates that as the price advances towards resistance, sellers become more inclined to sell and buyers become less inclined to buy. By the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising above resistance.

Reply With Quote
The following user says Thank You to JustinIsHere for this post:
 
  #12 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance

I believe I can illustrate exactly why previous support becomes resistance and vice versa.

I tried to post a chart but I'm new and need 4 more posts. Ill be back with 4 more posts then a chart...sorry

if you will please look at the chart link above. It is an inverse example but the principle works both ways. In the picture is a blue line at a nearby pivot high. Clearly a resistance level. All pivots are simply reactions to what traders commonly refer to as supply or demand. In the case of the pivot high in this picture it is a reaction to supply. Supply being sell orders. To the right of that price point we have a bar that crosses the line deeper into said supply. That same bar, because of said supply promptly pulls back into demand. From that demand the very next few bars show price move even deeper into said supply. Then the next few bars have price returning to the previously mentioned demand.

if we look at the "cross over" in the circled area what we have to the left of the cross over is a supply level. The level of supply becomes used up by a larger amount of buy orders. It becomes simple math. The buy orders at that level, at that line, at that resistance level, outnumber the sell orders. Price moves up because now, at the time of the cross over, there is an abundance of buy orders and zero sell orders now.

So now when price revisits this price level a little farther over we see what was once resistance has now become support. It is purely a matter of a supply and demand imbalance.

thanks for reading my post

Reply With Quote
 
  #13 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance


all pivots are support and resistance levels

Reply With Quote
 
  #14 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance

every individual candle and bar itself illustrates support and resistance

Reply With Quote
 
  #15 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance

pivots, both highs and lows, are reactions to supply and demand and become pivots because of the supply or demand imbalance.

Reply With Quote
 
  #16 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance

hopefully my next post I can post the chart that went with my first post.

Reply With Quote
 
  #17 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance


JamesPowell View Post
I believe I can illustrate exactly why previous support becomes resistance and vice versa.

https://www.tradingview.com/x/n8OChU7O/

if you will please look at the chart link above. It is an inverse example but the principle works both ways. In the picture is a blue line at a nearby pivot high. Clearly a resistance level. All pivots are simply reactions to what traders commonly refer to as supply or demand. In the case of the pivot high in this picture it is a reaction to supply. Supply being sell orders. To the right of that price point we have a bar that crosses the line deeper into said supply. That same bar, because of said supply promptly pulls back into demand. From that demand the very next few bars show price move even deeper into said supply. Then the next few bars have price returning to the previously mentioned demand.

if we look at the "cross over" in the circled area what we have to the left of the cross over is a supply level. The level of supply becomes used up by a larger amount of buy orders. It becomes simple math. The buy orders at that level, at that line, at that resistance level, outnumber the sell orders. Price moves up because now, at the time of the cross over, there is an abundance of buy orders and zero sell orders now.

So now when price revisits this price level a little farther over we see what was once resistance has now become support. It is purely a matter of a supply and demand imbalance.

sorry for the small posts above

thanks for reading my post

I had to make all the little ones to re post this one with the link to the chart

Reply With Quote
 
  #18 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance

I hope I said that right

Reply With Quote
 
  #19 (permalink)
Trading Apprentice
conyers ga usa
 
Futures Experience: Advanced
Platform: apex
Favorite Futures: es
 
Posts: 15 since Nov 2016
Thanks: 4 given, 11 received

support/resistance

https://www.tradingview.com/x/ihNRh4mn/

here is a follow up from last nights posts showing a second visit to the same support ( aka demand) area that was previously resistance (aka supply).

Reply With Quote

Reply



futures io > > > Why exactly does previous support tend to become resistance?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
A different look at Support and Resistance Xav1029 The Elite Circle 18 September 1st, 2012 07:07 AM
Support and Resistance SpyderTrader NinjaTrader Programming 11 May 13th, 2012 05:24 PM
Support and Resistance tony2009 Traders Hideout 13 July 8th, 2011 07:12 PM
Support Resistance Break emini_Holy_Grail Traders Hideout 3 June 4th, 2010 07:51 AM


All times are GMT -4. The time now is 04:13 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-15 in 0.12 seconds with 20 queries on phoenix via your IP 54.90.92.204