Posts Tagged ‘support and resistance’

The idea behind support and resistance is that there are certain price levels that acts as a barrier and makes price stop and reverse. Support is a level that prevents from being pushed downwards. Resistance is a level that prevents the price from being pushed upwards. The more times the support or resistance level have been tested, the stronger it gets. It happens because the more obvious level is […]

By definition, a support line is a horizontal line that reverses the current downtrend back in an upward direction. Looking at the chart, we have this downtrend. What you can see here in this cluster of candles, the downtrend fails to continue downwards. Instead, it bounces back up in an upward direction. So, if we take a horizontal line and join the lows of these candles, this line has not been penetrated by the downtrend. […]

Zoe Fiddes in this video speaks about support and resistance levels and the associated trading psychology to these levels. The reason that these resistance and support levels form in a market, when price is range bound, when price bouncing between the floor and the ceiling, it has got a lot to do with psychology and the consensus of the market. When price reaches a certain point, it turns back round and comes back to the floor and so […]

Support is a level at which a falling currency pair encounters resistance from the market. This happens because the number of traders who expect the price to stabilize or rise is greater at this level. So, the pair is literally supported. Resistance is a level at which a rising currency pair struggles to increase further in value. The number of traders who believe that the pair will not cross this level is greater. So, […]

How to spot market trends by reading charts? Get to know the trend lines. Values, lines, charts, indexes — financial analysis seems to confuse you? You think all those graphs are too complicated? This video shows you the simple steps to figure it all out. Let's start with our first lesson in which we will show how to identify market trends. Learn how to draw the trend […]

Erich Senft in this video explains about confirming support and resistance in a chart. You will often hear about the confirmation of support or the confirmation of resistance and all that really means is learning to recognize when the market is showing you support and when it is showing you resistance. You might ask how in the world do I do that. Let's for example, look at the Soyabean chart. We have a market which […]

Bollinger Bands are essentially the SMA in the shape of a channel rather than a single line. Because they combine the traits of both channels and simple Moving Averages, they tell us about both support and resistance, and momentum. What are the advantages of BBAs over channels? They are better for anticipating the crowd moves. Like momentum averages, they are plotted by an objective calculation. They tell us about potential support and resistance […]

Being able to gauge the strength of the support and resistance levels is the basic for predicting price movements. The stronger the SR level is, the more likely it is that the price will halt to reverse that level. If price makes a sustained break beyond that SR level, it is a signal that the trend is strong and the price will probably continue to the next SR level. To gauge the strength of a given SR level […]

Along with price levels, trendlines are one of the most basic kinds of support and resistance. We will look at the basic four types of trend lines. 1. Simple, single up or down trendlines. 2. Channels which are comprised of two parallel lines, that capture most of the rising, falling, or the flat price range for a given period. 3. Moving Averages. 4. Bollinger Bands, a variation of Moving Averages. The goal of all […]