Support and resistance
The concept of support and resistance is the groundwork of technical analysis. The concept is that the price will find support and resistance at certain price levels. You can think of it as the ceilings and floors in the market. If the price burst through a resistance, that resistance can become a new support. This is also true on the short side when the price bursts through a support, it can become a new resistance level. The second picture shows a an example of this role reversal. The third picture shows a security that is trading in a sideway channel.
In Ichimoku cloud trading the support and resistance is not a single price but a range of price. Supports and resistances can be technical, fundamental or psychological barriers. You can probably tell from the pictures see why understanding support and resistance can become very useful for your trading decisions.
In Ichimoku cloud trading the support and resistance is not a single price but a range of price. Supports and resistances can be technical, fundamental or psychological barriers. You can probably tell from the pictures see why understanding support and resistance can become very useful for your trading decisions.