Posts Tagged ‘technical analysis tutorial’
Learn About Support and Resistance with Technical Analysis Training
Wednesday, February 24th, 2010
For traders, one concept that is hard to figure out is that of support and resistance . This is perhaps so because support and resistance are invisible until they are encountered , and even when that happens without using multiple timeframes it can be hard to recognize what is actually happening .
There is a lot of effort and time that go into using technical analysis training to find out in the market where support and resistance levels are. A variety of tools have been put to use, including retracement levels, trend lines, moving averages, and even candlesticks .
Some work, some do not , and more aggravating , some work some of the time but not always . Knowing when a tool or indicator will be reliable is information that is worth a lot .
Many people find their efforts have shortcomings due to just using one tool , and one timeframe is used in application, and they work to use it under every condition. Better results come when a variety of tools , every one designed for a specific condition on the market, are put to use in a very organized and thought out program that takes into consideration trends and congestion. Technical analysis training will show that further progress towards accuracy will occur as you use various tools and apply them to different timeframes and the differing results are taken into consideration .
The best results come when a comprehensive theory of market action is employed that aids the trader in knowing what the market is currently doing , why the market is doing that, what is probably going to happen in the near future , and supply the trader with projected levels of support and resistance that can be monitored in real time as the market steps forward .
A tall order ? Well perhaps , but various technical analysis systems have accomplished this .
Let’s start with some definitions .
Support happens to be something that is below price , and this force when encountered helps to raise prices back up to where they were. This is made up of market buyers that are there but waiting to take action until price reaches a certain level , or of short position holders who may be forced to buy if the market runs against them . This group of buyers that flock around a particular price that causes support to act like support .
Resistance deals with something that is above price , and it is a force that when encountered pushes price back down into the range from where it came . This includes those sellers waiting to make a move until price reaches a certain level , or of those long position holders who must sell if the market goes against them.
Support and resistance can be identified with regular technical analysis such as a 10 period moving average . Or this can be represented with a system that is more evolved that you learn about by technical analysis training like Drummond Geometry .
With this method we see a more evolved use of tools to create higher time period overlays of support and resistance areas from the weekly and monthly charts onto daily chart . These higher methods provide traders with more support when making decisions to buy or sell . When using this method you can project into the future areas of support or resistance, so traders can be prepared as the market goes on.
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