Technical analysis

How to Use Key Levels in Trading

If the level is constructed correctly, a price reversal can be expected. In this case, we recommend trading in the opposite direction to the trend.

However, trends break through key levels from time to time and continue moving in the current direction. It means the trend is strong enough, and you should trade in the direction of the breakthrough.

The best time to do this is when the price touches the level from the other side. This is called a retest. When the price breaks through the resistance level and then goes back down, trade up. When the price breaks through the support level and then goes back up, trade down. Following a level breakthrough, support can become resistance, and resistance can become support.