Support and Resistance
The support and resistance are a of the concepts used in stock trading, forex and any type of financial operations. Is a very intuitive, however, most people think that the support and resistance are a line or a price determined when an area or price level:
Area Support identifies a price lower than that seen in strong demand, resulting in an arrest the downward movement. Is that level which compensates for the demand and supply, resulting in a rebound to higher prices.
Resistance Area, similarly, identify the price level that can see a strong supply and produces an upward motion detection. Also here is balanced between supply and demand, producing a negative response by reducing prices.
Otherwise we can imagine the support and resistance as steps a ladder, after reaching a certain level we have to go to the other, just-in-law is low.
One of the most important concepts of support and resistance is its dual capacity, ie, when a resistance is overcome automatically becomes a support and yet, when a support is exceeded passes automatically become resistance.
The following chart shows the path of resistance in support (never forget that are areas of price and not a single line).
Force on Support and Resistance
Force or tenacity to resist being overtaken in a support or resistance area is a question that can not be determined, and when the price comes close to these areas may or may not surpass the "million dollar question." But there are some indications that lead us to believe in the ability of toughness of a given area to another and is given by the number of times the price has rebounded. That is, a resistance level tested with several attempts to be outdone and always has been a rebound means a point of very strong resistance or support, while, when the resistance or support is tested a couple of times, can be considered weak. This is consistent with the number of times has been overcome.
The following example shows that the higher resistance (red) is stronger than the lower (blue) because the latter has been passed a time, while the former (red) or a single time.
We must add, that while not a law, it must take into consideration is that the stronger the resistance is overcome (run the same for the media) the greater the increase ( or drop in for support) ... "The bigger, heavier fall ..."
0 comments:
Post a Comment