When A Support Does Not Generate Further Value

13 Ağu 2019

A support may bring two possibilities, Reverse or Continuous Drop.
A method to judge the change of validation or strength of a support: rise percentage the support generates, if % decreases, the value of the support is decreased.
As shown in the chart, the Blue in 30M indicates the support. From the support, there were two bounces:
1st 2% rise from 11350
2nd 1% rise from 11350
The lower High Indicated the support did not generate more value.
Considering the big trend is down, the breakdown is high probability event, so the support should not be taken as a Demand Zone any more after two bounces. Instead, a short trade may be placed when the second bounce ended ( Green -> Red after the Lower High)

Indicator: 9 Seasons Rainbow Multi TimeFrames Pattern

Signals
Blue: Support
Blue -> Green -> Red: A cycle of Support -> Bounce -> End of Bounce
Green -> Red with a Lower High: Short Trade Entrance

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DISCLAIMER
This is only a personal opinion and does NOT serve as investing NOR trading advice.
Please make your own decisions, carefully assess risks and be responsible for your own investing and trading Activities.