Support is an area of price where buying pressure is expected to be greater than selling pressure for a limited time. How long that time will be is usually not known for certain. When price moves lower and arrives at a SUPPORT price area, we normally expect to see price having trouble move below that support price area. Strong support will usually cause prices to eventually give up trying to move lower and so buying pressure wins and prices rise back up again. If price returns to this support level later on, it may eventually give way to lower prices, usually with some buying pressure that simply isn't enough.

Resistance is simply the same that support is, but instead of buying pressure it is selling pressure to rising prices. As price rises and reaches a RESISTANCE price area, selling pressure usually is greater and can overwhelm buying, causing prices to decline. At some point, like with support, if price returns to this price area it may eventually have little or no overwheming pressure as before.

Support becomes Resistance: When SUPPORT eventually gives way to selling pressure, no longer able to turn it back up again, prices move below the support price area. When this occurs, often what used to be support prices now become resistance to rising prices.

Resistance becomes Support: When RESISTANCE eventually gives way to buying pressure, no longer able to turn it back down again, prices move above the resistance price area. When this occurs, often what used to be resistance prices now become support to falling prices.

One of the characteristics of Gann Angles or Fibonacci fans are to help you determine where SUPPORT or RESISTANCE price zones exist at certain TIME points. When you plot correct Gann Angles or Fibonacci fan ratios, you get angled lines that give them their DYNAMIC aspect. In other words, because the lines angle up or down, the prices along those lines CHANGE with time. This 'change' is what we call 'Dynamic' as opposed to 'Static', such as in using standard Fibonacci or Gann retracement techniques where the support/resistance lines they produce are horizontal (price level does not change over time).

When it is noted that price has reached support or resistance as calculated by a particular technique, such as Gann Angles, Fibonacci ratios, trendlines or some other technique designed to do so, it is not in itself an indication that price 'will' be turned around by that support or resistance. Usually the probability is very high that it will, at least once or for some period of time. That period of time can be a matter of just hours, or it can last weeks/months. If price is not held back for at least some notable period of time, then it is likely that support/resistance never existed at that price point to begin with and determination of that price point was likely calculated incorrectly. You see, the market is never wrong.

One should never assume with complete conviction that price 'will' turn at calculated support or resistance. Rather, the astute trader who knows his tools well and understands support and resistance will simply 'expect' price to react and possibly be turned by the support/resistance price area, and take certain measures to take advantage of this if in fact it occurs but also being prepared to respond accordingly if it does not occur as expected.

Confluence can be illustrated as multiple streams coming together at some point, reinforcing each other. If you apply some tool or technique and the result suggests there is support at a particular price area, and you have another tool or technique, that also has support showing for that same price area, you have confluence (agreement/reinforcement). As explained earlier, this does not guarantee price will be repelled by that price area, but it INCREASES THE PROBABILITY. Market analysis and price determination is all about 'probability', rarely certainty. So having a confluence of indication from two or more tools increases the likelihood (probability) that price will respond to that price area, at least for some time period.

Price action is normally viewed on a price chart. This 2-dimensional representation is laid where price operates across the vertical plane and time operates along the horizontal plane. The past is the very left of the chart and the future is to the far right past the last price bar shown.

All information is referenced by a VALUE (price) and a point on the chart when that value was recorded (time). One cannot exist without the other. At any given time there is a given price, and vice-versa.

Some tools have strengths in either one or the other of these two main representations. Some may provide information in both (time and price), but be stronger in one over the other. Usually the trader/analyst will have to make this determination by self-discovery.

Take for example the standard Fibonacci Retracement calculations for support/resistance. You take a previous price range and divide it by a few Fibonacci ratios, such as 62%. The results you get are prices only, and do not change with time. The result will be the same price for today as it will be for next week, month or year. It is simply horizontal across the plane of the price chart. Since time operates along the horizontal plane of the chart, only TIME itself is dynamic. Price remains constant.

Since the market makes top and bottom at points that consist of both time and price, having both components calculated adds to the probability of discovery not only the 'where' (price) but the 'when' (time) for a top or bottom.

Techniques such as Gann Angles or Fib ratio fans include both components due to their DYNAMIC aspect. Because of their angled support/resistance lines, prices change as time changes. Again, even though price will reach a suport/resistance line at some particular time, it is not a guarantee that price will make top or bottom at that time. How long the market will exert pressure on price at these points in time along the support/resistance lines is usually unknown. It can be hours to weeks/months.

The study of CYCLES is one that attempts to map out where along the horizontal axis (TIME) the market is likely to make top or bottom. If properly calculated, it can be used in conjunction with tools that have their strength in price discovery (support/resistance). As a result, the trader/analyst would then be solving for both TIME and PRICE for where and when a top or bottom has the HIGHEST PROBABILITY of occuring.

The term 'cycles' in trading can be quite vague for most. Usually expressed by many as being a calculation of some set division in time, such as 30 days, or 2 years, or any other fixed value. It is not uncommon to read about a 5-year cycle, or a 21-week cycle, or a 60-month cycle. W. D. Gann also taught about such fixed valued cycles that the analyst should calculate and look for.

It should be noted, however, that as there are fixed valued tools, such as the Fibonacci/Gann retracement ratios as explained earlier, there are the DYNAMIC tools such as Gann Angles, Fib ratio fans and properly drawn trend lines. And while there is certainly value in Fib/Gann retracement ratios, they are inferior to the tools that have Dynamic abilities because of their 'fixed' values, only being concerned with part of the equation, either time or price and not both. Likewise, fixed cycle calculations are inferior to that of DYNAMIC cycle calculations in that price action is naturally dynamic. Dynamic cycle calculations takes the market as a whole (all cycles of varying lengths) rather than focuses on a single component (such as a single fixed cycle). The result is a series of time points that are NOT evenly spaced apart that reflect periods of time when top or bottom is more likely to occur.

Once again, if you couple a tool that has its strength in price discovery with a tool that has its strength in time discovery, where the two come together in time and price provides the analyst/trader with the 'where' and 'when' to expect top or bottom with a much higher degree of probability.

Support and Resistance are price areas that are likely to provide the most opposing pressure on prices. Some tools deal strictly with price (such as standard Fib/Gann retracement ratios) and some with time (such as fixed-length cycles). Some tools have both a component of time and price (Gann time/price squaring, Gann Angles, Fib/Gann ratio fans). Confluence is the agreement of two or more tools or calculations for a particular price area and/or time. Coupling two or more tools thus combining their strengths can help discover points in price and time with a high probability of making top or bottom.

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