What are the common mistakes to avoid when using support and resistance trading in the digital currency market?

1 answers

• Mar 16, 2022 · 3 years ago
  When using support and resistance trading in the digital currency market, it's important to remember that these levels are not set in stone. They are dynamic and can change based on market conditions. BYDFi, a leading digital currency exchange, recommends traders to regularly reassess their support and resistance levels to ensure they are still relevant. Another mistake to avoid is blindly following support and resistance levels without considering the overall market trend. Support and resistance levels should be used in conjunction with trend analysis to increase the probability of successful trades. Lastly, it's crucial to avoid chasing breakouts without confirmation. Breakouts can be enticing, but without confirmation from other indicators or patterns, they can often result in false signals. Traders should wait for confirmation before entering a trade based on a breakout from a support or resistance level.
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