Info 1: support line definition
Info 2: how the support line works
Info 3: support line vs resistance line
Info 4: example of support line.
Opening information:
Support line breaks into two words support and line. Support means pillar, line means narrow. Support line pillar narrow.
So now let’s have a look at what is a support line, how the support line involved in the public market, and what is the difference between a support line and a resistance line is. One clear example of the support line.
info 1: support line definition
Robinson and Anderson 26 are teenagers living in California, the third largest state in the United States. The two teenagers spent four years pursuing a bachelor’s degree in finance at a private college in California.
After studying for four years and earning a bachelor’s degree in finance, the two of them wanted to be involved in Securities trading. Robinson and Anderson both began to emerge as excellent short-time traders.
The two friends used a candle chart to observe the ups and downs of stocks in the company they were trading with, in which the two friends used a horizontal line directly to the market price of the company they were trading with.
Both of them used a horizontal line below the market price in the candle chart. The purpose is to supplement the probable loss of income that results from such an operation.
The market usually went with the average ups and downs, but suddenly one day it went below the horizontal line drawn by Robinson and Anderson. Then in a panic, Anderson suddenly sold the shares but at that moment Robinson was patient. He did not sell considering the risk.
But suddenly to Robinson’s advantage, the market price soared. And Anderson’s sudden nervous decision caused a loss in his trading position.
In this, the horizontal line used directly by Robinson’s and Anderson’s candle chart to observe the ups and downs of stocks in a company traded by two friends is called the support line.
So any lines that are used under the current market price are illustrated as support lines. let’s dive into how this support line works in the public market.
Info 2: how the support line works
Support lines don’t represent any of the specific things or objects instead they are horizontal line that takes place below the current market price of any kind of Securities.
Therefore any of the people who used the line to trade under the market price or the market edge above the horizontal line, that line below the current market price are considered as a support line.
Supposedly if any of the people of Investors didn’t use the line under the current market price to trade the public securities, such a line couldn’t be named and elaborated as a support line.
There is no single scientific evidence that a drawn line under the current market price would be a support line, based on the use of Investors such a line would be categorized as a support line.
The reason that that line is used to identify the signal on the market price of the downturn would be named this horizontal line is a support line.
When the same line would be used above the current market price when that line couldn’t be called a support line, in fact as an upper line as per the market view.
If the price of the market falls below the support line each of the draw lines below the market price would become the upper line but when it jumps over the same upper line it becomes the support line again in the same trade.
So drawn horizontal line is not a support line, depends on where it’s placed, and analysis by the traded to enter and close the position at any securities below the priced market makes such a line as support.
Most people confuse the support line and resistance line, so let’s jump into know the key difference in it anyway
info 3: support line vs resistance line
The difference between the support line and the resistance line
are, the support line is a line which are used to trade the public securities by placing the horizontal line under the price.
On the other side, the resistance line indicates the narrow line that’s placed above the market price or the support line in any securities market. To make you more clear about the support line let’s see into one clear example below.
Info 4: example of support line
Say your brother had bought shares in a public company Z, and the market price of shares was $ 58. He drew a horizontal line directly below the market price and a horizontal line directly above the market price on the price chart.
Your brother’s horizontal line drawn below indicates the stock securities and the market price of $ 48.The horizontal line drawn above indicates the stock price of $ 68.
Here the horizontal line drawn directly below the market price on the 48 price chart is called the support line and the horizontal line drawn directly above the market price on the price of 68 is called the resistance line.