Basics trade – Trendlines

Basics trade

Essentially t a little ways to determine the resistance and support levels. One way – using a trend line, which determines the level of support and resistance.

What is the use of the trend line: if the trading instrument, which is in the process of price increase, ie growth occurs prices tool that draws on the chart market zigzags, where any subsequent points will be provided prior to the above points Maximum Minimum .

Support line will be the one line that is directed upward and held on the last point on the graph. Accordingly, to achieve the field lines of support, the market demand will increase by trading instrument, thereby whipping the market even higher. But the price down upadana support line, it would mean that the market has no problems with buyers meet demand. This point will be, is a clear signal changes in the balance of demand and supply.

 Set a trend reversal. Repeatedly support line that existed, still continue to “work” for a few weeks and sometimes even a few months after that, they were “punched” as now minor resistance line. Only the price is broken uptrend support line and go below it, then the market will provoke a so-called “Doboj.” But sooner or later, when I have accomplished the next leap up, then the price touches the former support line, not from the top of her hand, and on the bottom, thus the line will now act as a resistance level. The area around this line will provide a great opportunity to initiate a short position, because the next most likely market movement will seek down.

Conclusion: Not only the trend-lines should be presented on your charts, which will emphasize the nature of these price patterns, but the main lines of support and resistance remaining in the previous trend, since they will be relevant for a long time.

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