Hey there!
As I mentioned in my last post, I'm learning technical trading. As I know that the best way to learn is through experience, today I wanted to try and find my first pattern.
The pattern I learned yesterday is called support level.
Support level
Why does it happen?
This pattern appears when there is a general sentient to buy a certain asset at a specific price. This implies that the sell orders placed won't go below that price until all those buy orders are completed. The trend of the price is usually upward (bullish) after the resistance level is met a couple of times. This is called support testing.
How do I identify it in real time?
If you are trading in real time, this can somewhat be seen in the order book. If you see a huge amount of buy orders for a certain price, this might be a support level.
Example
I searched an example to see if this really happens.
I've reached out to TradingView (well known for its graphs), and got the forex pair EUR/USD, and started searching.
Here is what I've found. The view is from 20 march, 2024. We can see that the price bounces 3 times over the same level (1.08375) and then goes up. This "bounces" happened over 2 hours, giving us plenty of time to operate if we trusted this support level.
I bet you can find better examples and I ask you to show me in the comments (specify pair, date and time).
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