When is the right time to sell or buy?
In this video, you will learn when the right time is for buying / selling digital assets. Before that, there is one last thing you need to understand first. What if the support or resistance line is broken by candlestick price movements in that period? Curious? Do not go anywhere!
Try to look at this digital asset chart again, this time we will use the moving average indicator as a line of resistance or support. For simplicity, we will use the abbreviation MA for moving average. At the beginning or on the left, we can see that this MA line serves as support for the price movement of the period. However, shortly afterwards, this support line was broken down by the price of candlestick movements during that period. This support line has changed into a resistance function for the next price movement to the end.
Conversely, for this chart, it starts with the MA line which has the function of resistance. Shortly thereafter, this line is broken up by candlestick price movements. This means that the resistance function at the beginning of the price movement has changed to support for the next price movement. Movements like this are called support and resistance functions that change.
Well, how about something like this? For this chart we see from the left side. The MA line initially has a function as support for price movements in that period. However, when the candlestick breaks above the MA line, the MA line will change into a resistance function for the next price movement. In this section, we can also see that the candlestick is breaking down again, this indicates that the MA line is turning back into support function at the end.
Now we have seen examples of support that is broken and changed into resistance. And this also applies vice versa, when the support is broken up by the candlestick, the support function will change to resistance for the next price movement.
In addition to the MA indicator, we can also use the trend line to find out where the position of resistance or support in price movements. When prices break above the trend line that is functioning as resistance, this trend line will change into a support function in the next price movement. And this also applies when the trend line support is broken down by candlestick price movements. It will change function to resistance.
At this point, you must have understood how to read information from candlesticks, price trends, resistance support and also how to look for it on a chart that you have learned from the first episode of Indodax Academy. Next, we will use all the information you have learned, to find when the right time to buy and sell digital assets that you have.
One of the uses for learning support and resistance is that they can act as a buying and selling area in a graph. The surefire way is, buy at support and sell at resistance or the term buy low and sell high. There is also another strategy, which is to buy at resistance and sell at the next resistance, or the term is buy high and sell higher.
On this chart, you can see that when prices enter the support area and have a tendency to reverse direction, the action that can be done in that period is buying. Because you can buy it at the cheapest price and before it rises again, it will be expensive. Likewise, when prices enter the resistance area and have a tendency to reverse direction, selling can be done in that period so that they can sell at the most expensive price before going down again.
The conclusion we can take is to buy at support because when prices are cheap and cheap and sell at resistance when prices are more expensive.