Technical Analysis Training – Explaining Resistance and Support
One of the tough concepts that traders need to understand is the concept of support and resistance. This often is because until you encounter them, they are actually invisible , and even when that happens it’s still tough to realize what’s going on without going with multiple timeframes .
Enormous amounts of time and effort are spent trying to use technical analysis training to determine where support and resistance levels are in the market . Many different tools have been used , including those like candlesticks, moving averages, candlesticks, as well as retracement levels.
Some work, some do not , and more frustrating , some may not work all the time, but some of the time. The information on whether or not an indicator or tool is going to work is information that is worth a lot .
Because many people only use one tool, their efforts may fall short, and one timeframe is used in application, and they work to use it under every condition. You reap better results when various tools, optimized for a particular condition of 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 continue to show that progressing towards precision will occur as you use various tools and apply them to different timeframes and various results are considered .
Top results occur when you use a total theory of action on the market that shows a trader the market and it’s current status, why it’s currently doing it , and what is likely to happen in the near-term future , and supply the trader with projected levels of support and resistance that as the market goes forward can be monitored .
Does it sound difficult? Possibly, but various technical analysis systems have accomplished this .
Here’s a look at a few definitions .
Something below price is support, and this force can push prices back up from where they fell when it is encountered . This is made up of market buyers that are there but waiting to move until price reaches a certain level , or of those short position holders that have to buy if the market begins going against them. Those buyers that bunch up around a specific price that causes support to act like support .
Something above price is resistance, and this force pushes prices back down to where they were when it is encountered . This includes those sellers waiting to make a move until price reaches a certain level , or of long position holders who may be forced to sell if the market runs against them .
Support and resistance can be identified with technical analysis that is conventional such as a 10 period moving average . Or a more involved system can be represented like you learn in technical analysis training , Drummond Geometry being one example.
With this method we see a more evolved use of tools in order to create more time period overlays of resistance and support areas onto a daily chart from the monthly and weekly charts . 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 the trader can prepare himself as the market steps forward .
