Candle Reading - Foreign exchange Trading And Learning (Part 9)

Minor Price Support/Resistance:

                                                
Minor Price Support is an artificial horizontal line representing an area, which previously served as price resistance, but has now transformed to price support (
Figure 17).
Likewise, Minor Price Resistance is an artificial horizontal line representing an area, which previously served as price support, and has now transformed to price resistance (Figure 18).
When considering a stock as a trading opportunity it is important to note the location of the nearest support and resistance levels.
Stocks near areas of support make for better buy opportunities and stocks near areas of resistance make for better short opportunities.
In the same way, the trader should be more cautious about shorting stock above areas of support, and buying stock near areas of resistance.


Trends:
             Every stock is in one of three states:

 1) Up Trend, 2) Down Trend, and 3) Sideways Trend (Figure 20).

An Up Trend is defined by a combined group of greater highs and higher lows.

A Down Trend is defined by several highs that are reduced by reduced lows.

A Sideways Trend is defined by a genuine quantity of fairly highs that are equal lows.

                                           

                                                                                                          Next Page