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<blockquote><center> Authored by @madridbg, via Power Point 2010, using public domain images.<a href="https://pixabay.com/es/photos/pizarra-escuela-educaci%c3%b3n-2618793/ " rel="noopener" title="This link will take you away from steemit.com"> StockSnap</a></div></center></blockquote></div>
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<div class="text-justify"> Greetings and welcome dear readers of this prestigious platform, this new season of #SteemitCryptoAcademy brings them and in the planning of the courses we can observe a varied range of possibilities that allow us to continue the training process that we started in the previous sessions.
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<div class="text-justify"> In this sense, through the following publication we will make the conceptual and practical approach to each approach requested by Professor @allbert, as a requirement to participate in his course of week 1, associated with trading with levels of strong and weak supports and resistances that generates the price action, as well as gaps or breaks that occur in the market market.
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<center><h2><strong> CONCEPTUAL AND PRACTICAL APPROACH TO THE REQUESTED APPROACHES </strong></h2></center>
<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> This section of the subject, will allow us to comply in a conceptual and practical way to each question asked by the Professor, so that we can understand the functioning of the market according to the important trading zones that generate strong and weak support and resistance according to the number of operations that accumulate in search of generating liquidity, which we will describe below:
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<div class="text-justify"> <h3><strong>1. Explain graphically the difference between weak and strong levels and describe why these differences occur in the market.</strong></h3></div>
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<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> When we make mention of support and resistance levels, we are talking about imaginary zones or lines where the price can bounce steadily or not, as if it encounters some barrier that prevents it from continuing to go up (Resistances) or down (Supports).
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<div class="text-justify"> One way or another these lines, we can draw them manually or use the volume per session to determine these zones, which are <strong>justified,</strong> as those spaces of time where there is a large confluence of orders that investors have made according to speculation and analysis performed on an asset and that market action tends to activate in search of generating liquidity.
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<div class="text-justify"> Based on the above justification, we can establish the following approaches:
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<div class="text-justify"> 1. The levels of <strong>strong support and strong resistance,</strong> are these areas, which the price respects and produces that the same bounces on multiple occasions, therefore, it is to be expected that the amounts of mounted orders are so large that a large flow of money moves, hence they are difficult areas to break according to the price action, and where it can be used as a reference to mount our buy or sell positions. </div>
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<div class="text-justify"> If we analyze the chart, we can observe the horizontal line that we have generated according to the price action, where we have delimited the areas where the price has bounced, generated either a support or a resistance that the price respects over time and that ends up modifying the direction of the price.
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<div class="text-justify"> 2. The levels of <strong>weak supports and resistances,</strong> as well as the previous ones, are important trading areas, where the quantities and volumes of orders is lower, therefore, the price tends to break very easily, since the orders are executed in an accelerated manner. In this sense, it is the liquidity zones that causes the price to change its orientation is seeking to generate a momentum that allows to break the support or resistance generated.
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<div class="text-justify"> In the previous chart we can see weak support zones, which the price respects on a couple of occasions but then breaks easily because the orders have been executed in full and the price has generated sufficient liquidity to break these areas.
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<div class="text-justify"> In general terms, we can delimit that the supports or resistances generated in the market, are influenced by the buy and sell orders, as well as the trading volume according to the price action.</div>
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<div class="text-justify"> <h3><strong>2. Explain what a Gap is. What happens in the market to cause it?</strong></h3></div>
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<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> In the previous section, we have mentioned that the liquidity levels determine the zones of supports and resistance either strong and weak, however, when the liquidity levels are so large, as well as the trading volume, the price action tends to break its normal action and makes jumps from one level to another as if the candles did not finish forming, these types of scenarios are known with GAP or gap, which is generated in the price action and as mentioned are consequences of the presence of a large flow of money that tends to generate a manipulation in the market.
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<div class="text-justify"> As we can see in the chart above, there is a blank space between one candle and others, this gap is what we call GAP and to corroborate the flow of investment, let's look at the volume so large that is displayed hence this jumps between candles.
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<div class="text-justify"> Consequently, we must take into account this scenario as it becomes strong zones that we can analyze to develop our buy or sell orders within a given asset.
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<div class="text-justify"> <h3><strong>3. Explains the types of Gap.</strong></h3></div>
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<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> Keeping in mind the definition of GAP or rupture, we must be clear that there are different ones, which we will describe below:
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<div class="text-justify"> <strong>1. Breakout gap: </strong>this type of movement corresponds to the type of scenarios, where the price enters in range or lateralization, the gap or breakout, allows us to observe the beginning of a clear trend that can be bullish or bearish according to selling or buying pressure generated by investors.
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<div class="text-justify"> In this sense, after the breakout gap these zones behave as strong support and resistance that we must take into account in our technical analysis for a given asset.
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<div class="text-justify"> If we analyze the previous chart for the Amazon asset in 4-hour time frame, we realize that after the accumulation zones or generated range, there is a clear breakout that allows us to determine the beginning of a new trend, which we can use as a reference to speculate our entries either in buying or selling.
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<div class="text-justify"> <strong>2. Gap out of control: </strong>this type of breakout usually presents difficulties because of how difficult it is to identify them, likewise the same are presented as a scenario of trend continuation that is generated according to the number of orders that investors have placed in the market, like the previous gap, we can use it as important trading areas that will develop areas of support and resistance.
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<div class="text-justify"> In the above chart for the asset Amazon in temporality of 4, we can observe that the trend is still very young so there has been a buying and selling pressure that ends up moving the market in the same direction of the trend after the generated breakout.
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<div class="text-justify"> <strong>3. Exhaustion gap: </strong>according to the data analyzed this type of gap is formed due to a last push that the price generates as a way to resist the completion of a trend, to operate this type of gap is discouraged to use the areas of support and resistance, on the contrary it is analyzed or operate in the setbacks, since the price will end up covering the levels that have left unfilled product of the orders that investors have placed in the market.
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<div class="text-justify"> If we analyze the chart for the same Amazon asset in temporality of 4, an exhaustion gap has been generated, producing a jump where the price retreated in search of the areas where there was the jump, in order to cover the levels that had not covered and thus continue with its normal action. </div>
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<div class="text-justify"> <h3><strong>4. Perform a buy or sell using Strong Supports and resistances. Explain the procedure.</strong></h3></div>
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<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> In order to respond to this approach I will use the application provided by bitsgap so that we will make a buy entry for the BAKE/USDT pair in 5 minutes timeframe using the principles of the BRB strategy, the same refer to:
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<div class="text-justify"> 1. Determine the resistance or support zones according to the price action.
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<div class="text-justify"> 2. Wait for a confirmed breakout and evaluate the support points, which will end up generating a pivot point that will allow us to evaluate our buy or sell entry.
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<div class="text-justify"> 3. Set stop loss and take profit levels, usually meeting the 1:1 risk/reward ratio.
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<div class="text-justify"> In this particular case, we generated a sell order and as seen in the following chart the analysis was fully complied with, so the strategy allows us to generate profit if it makes a proper reading of the market. </div>
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<div class="text-justify"> <h3><strong>5. Perform a buy or sell through Gaps levels. Explain the procedure.</strong></h3></div>
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<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> To carry out this operation we will perform our analysis through a tradingview platform, so the first thing we must do is observe the formation of a gap or GAP, in this particular we will use the Amazon asset in 4-hour time frame to perform the demonstration of the mounted order.
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<div class="text-justify"> In this sense, we have delimited the generated breakout gap, which gives us an indication to mount our order in purchase by setting stop loss and take profit zones following the 1:1 risk reward ratio.
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<div class="text-justify"> So by applying the principles provided by the professor we can make winning trades when trading, as seen in the chart below.</div>
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<center><h2><strong> FINAL CONSIDERATIONS </strong></h2></center>
<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
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<div class="text-justify"> As we have been able to analyze in the body of this work, knowing the resistance and support levels allows us to have a broader view of the behavior of the price action of a specific asset, which allows us to speculate our buy or sell orders in order to achieve greater effectiveness when trading.
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<div class="text-justify"> Similarly Gap levels are important to take into account, personally I did not know why these jumps in the market, so it has been extremely useful every aspect addressed in the work suggested by the teacher. Hence I extend my thanks to Professor @allbert for such valuable information. </div>
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<center><h2><strong> OF INTEREST </strong></h2></center>
<center><img src="https://cdn.steemitimages.com/DQmZpsvWR62M4QVS5BPyApkJ4ejzpZAaQbu4U45xfA3dMwV/SEPARADOR.png"/></center>
<center> 1. Cover image designed by @madridbg, using public domain image</center>
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