- **Support Levels**: These are price levels where buying interest is strong enough to prevent further price declines. Support levels often mark the bottom boundary of the trading range, and traders expect buying pressure to increase near these levels, potentially leading to bounce-backs or reversals.
- **Resistance Levels**: These are price levels where selling interest is strong enough to prevent further price increases. Resistance levels often mark the upper boundary of the trading range, and traders anticipate selling pressure to increase near these levels, potentially leading to pullbacks or reversals.
Traders use various technical indicators and chart patterns to identify support and resistance levels in a range-bound market, including horizontal support and resistance, trendlines, moving averages, and chart patterns like channels and triangles. However, it's important to note that support and resistance levels are not fixed, and prices may break through them, leading to trend continuation or reversal. Traders use these levels in conjunction with other technical indicators, fundamental factors, and risk management strategies to make informed trading decisions.
- **Resistance Levels**: These are price levels where selling interest is strong enough to prevent further price increases. Resistance levels often mark the upper boundary of the trading range, and traders anticipate selling pressure to increase near these levels, potentially leading to pullbacks or reversals.
Traders use various technical indicators and chart patterns to identify support and resistance levels in a range-bound market, including horizontal support and resistance, trendlines, moving averages, and chart patterns like channels and triangles. However, it's important to note that support and resistance levels are not fixed, and prices may break through them, leading to trend continuation or reversal. Traders use these levels in conjunction with other technical indicators, fundamental factors, and risk management strategies to make informed trading decisions.