The trend. A first trend is a key element for the price of graphical analysis. While the market is moving in any direction not along a straight line but along a zigzag, mutual investment and higher low points of these zigzags is used to draw a line connecting the summits (picks) or the importance of low (low) a zigzag using technical tools of the computer program.
To establish a trend that two points are needed and the third is the point of contact for confirmation. On an upward trend table use should be using low down on the help of pics. The trend and a line that is about parallel to it and fired on the opposite side (through summits on an uptrend and hollows on a downward) form the chain of commerce. The two lines are the borders of the chain.
The lines of support and resistance. The top and bottom borders of commerce are called channels accordingly support and resistance lines. The peaks represent the price levels at which the selling pressure than the pressure of purchase. They are called resistance levels. The depressions, on the other hand, represent levels at which the selling pressure succumbs to the pressure of purchase. They are called support levels. In an uptrend, the consecutive support and resistance levels must exceed each other. The reverse is true in a decline. Although a few exceptions are acceptable, these failures should be considered as warning signals for trend changing.
The importance of trends is a function of time and volume. More price bounce off support and resistance levels, the greater becomes the trend. Volume of trade is also very important, especially the critical support and resistance. When the currency bounces off these levels, under a heavy volume, the importance of the trend increases.
The importance of support and resistance levels goes beyond their original functions. If these levels are convincingly penetrated, they tend to turn into just the opposite. A firm support level, once it is entered on a volume so high, probably transform itself into a strong resistance. However, strong resistance becomes a strong support after being penetrated. In general, to assess the reliability (this is the possibility of a pause) border trade chain to take a decision to close or put an existing post should govern itself with the following rules:
1. A chain is the most reliable, the more there is. Hence, the strength of very old channels (for example, existing more than 1 year) has declined sharply.
2. A chain is the most reliable, most is its width.
3. Resistance May be broken if returned on the basis of an increasing volume.
4. A strong chain is less reliable in comparison to a fresh.
5. Support May be broken independent volume.
To establish a trend that two points are needed and the third is the point of contact for confirmation. On an upward trend table use should be using low down on the help of pics. The trend and a line that is about parallel to it and fired on the opposite side (through summits on an uptrend and hollows on a downward) form the chain of commerce. The two lines are the borders of the chain.
The lines of support and resistance. The top and bottom borders of commerce are called channels accordingly support and resistance lines. The peaks represent the price levels at which the selling pressure than the pressure of purchase. They are called resistance levels. The depressions, on the other hand, represent levels at which the selling pressure succumbs to the pressure of purchase. They are called support levels. In an uptrend, the consecutive support and resistance levels must exceed each other. The reverse is true in a decline. Although a few exceptions are acceptable, these failures should be considered as warning signals for trend changing.
The importance of trends is a function of time and volume. More price bounce off support and resistance levels, the greater becomes the trend. Volume of trade is also very important, especially the critical support and resistance. When the currency bounces off these levels, under a heavy volume, the importance of the trend increases.
The importance of support and resistance levels goes beyond their original functions. If these levels are convincingly penetrated, they tend to turn into just the opposite. A firm support level, once it is entered on a volume so high, probably transform itself into a strong resistance. However, strong resistance becomes a strong support after being penetrated. In general, to assess the reliability (this is the possibility of a pause) border trade chain to take a decision to close or put an existing post should govern itself with the following rules:
1. A chain is the most reliable, the more there is. Hence, the strength of very old channels (for example, existing more than 1 year) has declined sharply.
2. A chain is the most reliable, most is its width.
3. Resistance May be broken if returned on the basis of an increasing volume.
4. A strong chain is less reliable in comparison to a fresh.
5. Support May be broken independent volume.
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