However in a bearish trend the previous support will now become the new resistance. We are looking at the market to break below the previous level of support and provide a trading opportunity.
Let’s take a look at a downtrend example now. In this case we have our high, our lower low and then our lower high and so on. Once we break below this level we will be looking for a pullback. As you can see this area breaks up to the previous level of support and this becomes resistance which means this trend continues pushing down. Your confirmation to enter a trade is a confirmation of two candles below support level that is now broken.
For now, it is important that you understand that we are looking for breaks and retests of support and resistance levels in order to confirm an entry point.
Let’s take a look at a downtrend example now. In this case we have our high, our lower low and then our lower high and so on. Once we break below this level we will be looking for a pullback. As you can see this area breaks up to the previous level of support and this becomes resistance which means this trend continues pushing down. Your confirmation to enter a trade is a confirmation of two candles below support level that is now broken.
For now, it is important that you understand that we are looking for breaks and retests of support and resistance levels in order to confirm an entry point.