How to trade the "Crossed Support/Resistance" alert

Image 1: ADABTC [2h] - Crossed Resistance

1. Requirements

1.1 Price crossed support/resistance

In Technical Analysis, support and resistance levels are referred to price levels (or zones/area's) on a chart where price is expected to pause before further up- or down movement, or even reverse direction.

Support- and resistance levels are meant to be entry- or exit points within trades, as price is expected to bounce from these levels. When price breaks the support- or resistance level, continuation is expected until price encounters the next support- or resistance level.

Support- and resistance levels occur on all time frames, where higher time frame levels are supposed to hold more value than low time frame levels. Support- and resistance levels are commonly identified in a chart as trendlines, (boxed) zones and/or moving averages on price charts. Support- and resistance area's can be identified e.g. based on price history as area's where price commonly spends more time before continuation or bounces (and thus reverses) from.

A crossed resistance might provide a buy opportunity as continuation is expected, where a crossed support might provide a sell (or short) opportunity.

1.2 Support-/Resistance flip

When a resistance level has been crossed it is anticipated to act as support. In case a support level has been crossed it is anticipated to act as resistance.

A support-/resistance level is broken when a candle closes above(in case of broken resistance) or below (in case of broken support the level.

You'd want to see buy pressure at the broken resistance, which proves the level has flipped to support in case you are looking for an entry or holding you bag for more profits.

You'd want to see sell pressure at the broken support, which proves the levels has flipped to resistance in case you are looking for a short setup. This is also a sign to sell your bags in case you are currently holding a position.

1.3 Corresponding candlestick (formations)

You would like to see corresponding candlestick/candlestick formations for confirmation of a support-/resistance flip.

In case of a broken resistance (and thus flip to support) you'll be looking for bullish candlestick formations above the level.

In case of a broken support (and thus flip to resistance) you'll be looking for bearish candlestick formations underneath the level.

2. Examples

Image 2: ADABTC [2h] - Crossed Resistance - Checklist

2.1 Checklist

✅ In this example we received an alert by the CryptoCoinScanner of a crossed Resistance
✅ We'll be looking for a confirmation that the crossed resistance will act as support (candle close above the level)
✅ When the broken level is being retested, you'll be looking for bullish candlestick formations

Important: Don't buy yet!

2.2 Buy

Wait until the crossed resistance level is confirmed broken by closing a candle above the level.
It is important that candles closes remain above the broken level. A wick through the level is allowed.
Look for bullish candlesticks/candlestick formations
If the the broken level seems to hold, you could take position. Always make sure you place a SL in order to secure your capital in case the support doesn't hold.

Image 3: ADABTC [30m] - Crossed Resistance - Buy

2.3 Result

Image 4: ADABTC - Crossed Resistance - Result

🚀 🏆 In this example we made more than 40% profit

Happy trading

CryptoCoinScanner Team