Support Turned Resistance
BearishContinuationBeginnerThe floor breaks. Price crawls back up to it, and the old floor becomes a ceiling.
Verdict: SkipBitcoin 4H: 6 trades, won 33%, avg trade +0.8% vs random day −0.2% (too few trades to judge). Backtest
Price drops to the same floor twice, and buyers hold it both times. That's support.
step 1/7
Trade rules
| Direction | Short (sell) |
|---|---|
| Entry | Two equal main swing lows make support. After a close below it, price drops 2% (Bitcoin) or 2.5% (stocks) further, then rallies to within half an ATR of the level within 30 candles. Within 3 candles of touching it, a candle CLOSES below the previous candle's low. |
| Cancelled if | A close more than half an ATR above the old support, a candle trading above the retest high before the entry, or no retest within 30 candles. |
| Target | Range height, projected from the breakout |
3 common mistakes
- Shorting the first touch of the old floor before any candle closes back down.
- Drawing the level after the fact: it has to be a floor that held at least twice.
- Holding the short after a close back above the old support. The flip failed.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 · too few trades to judge | 6 | 33% | +0.82% | −0.16% |
| US large caps (50) · 1D · 2016-2026 | 75 | 20% | −2.53% | −0.67% |
Verdict: SkipLost money on average on US large caps. Bitcoin had too few signals to judge.
pattern −189%random −50%