Recently, a friend asked me how to more accurately identify key levels in the market. I think this is a topic worth discussing in detail. In trading, pinpointing support and resistance levels is like equipping yourself with a "radar" for market movements, which can greatly improve decision-making accuracy.

Let's start with the basic concepts. A support level is a price point where the asset tends to stop falling or bounce back after a decline, reflecting the buying strength in the market. Conversely, a resistance level is where the price encounters selling pressure as it rises, indicating selling resistance. Interestingly, these two can transform into each other — when the price breaks through a resistance level, it may become a new support level, and vice versa.

So, how can we find these key levels? I’ve summarized a few practical methods.

First is the Range-Bound Method. When the price oscillates within a certain range for an extended period, it forms a box or channel. The top of this range acts as resistance, and the bottom as support. The longer the consolidation lasts, the more reliable these support and resistance levels become. Once the price breaks out of this range, subsequent volatility can be significant, presenting good trading opportunities.

Second is the Multiple Tests Method. If the price repeatedly tests a certain level—bouncing back after multiple dips—that level is a strong support. Similarly, if it repeatedly pulls back after testing a level from below, that’s an effective resistance. This method is especially useful in sideways markets, as breakouts often lead to substantial profit potential.

Technical indicators are also very important. When analyzing candlesticks, I prefer to look at the 1-hour, 4-hour, and daily charts simultaneously. The top, middle, and bottom of large bullish candles can serve as reference points, but support levels on the daily chart tend to be more reliable.

Bollinger Bands are another useful tool. On the daily chart, the upper band often acts as a near-term resistance, while the lower band serves as a short-term support. Combining this with the 4-hour chart can give a clearer picture of the strength of support and resistance levels.

Moving averages are also helpful. In an uptrend, the price often finds support at MA5 or MA10 during pullbacks. The MA30 on the weekly chart is typically an important support after sharp declines. In a downtrend, moving averages can serve as resistance levels.

Ultimately, mastering these methods aims to improve your judgment in trading. Using range analysis to identify key levels, paying attention to levels tested multiple times, and flexibly applying candlestick patterns and moving averages for confirmation—these skills combined can help you make smarter decisions in the market. I hope this sharing is helpful for everyone’s trading. Especially in volatile markets, accurately identifying support levels can save you a lot of detours.