Home | Business | Training

Technical Analysis Training - Some Common Patterns of Support and Resistance

By: Ted Hearne

Read More About Training

The market's reaction to support and resistance can happen in many ways...

As you pursue your technical analysis training, the following are some patterns that can be observed when this shows up in the market.

One that may be called touch and away as if the market is reaching, reaching, reaching for a certain level of support/resistance , and then when it gets in that vicinity , it reverses suddenly and retreats , like there suddenly was released some built up pressure . An exhaust is what this is . Resistance level holds in this formation . It's a pattern that looks like it's trying to get on through, by "chewing" or "worrying" the support or resistance level like a dog and his bone, but it ends in failure , and it doesn't get through , and then the market makes a turn in another direction .

Another way that support and resistance can give way is when prices jump through the anticipated level of resistance and continue on higher . The gap, known as a "pop" can occur quickly and can take a trader by surprise . With today's markets that are 24 -hour and the trading platforms that are electronic fewer gaps like this are seen because there is continous overnight trade and not a long time where no trading occurs. Still we do see gaps occur , and it's important to know how you should trade them . The thing to remember when taking technical analysis training is that once broken , support becomes resistance and resistance becomes support . Usually the previous support and resistance will be tested by the new prie level and then will go on up in the pop's direction.

Way number three that there is a breakdown of support and resistance is that the anticipated barrier is sliced through by prices much like a knife going through jelly , as if there were no support or resistance there at all .... and that's exactly what occurs . The price slides on through. This is most often seen when support or resistance is anticipated on a time frame but there is no backup from a time frame that is higher. One example is that if the daily shows resistance but to that point the weekly chart shows nothing - we should stay alert.

This is a point that is so important when it comes to your technical analysis training - when what you think is there really is not . It is a situation where the lower time period technical analysis shows support , but it is non-existant in reality, or if it does exist in the real world it is slight and weak and there is no real market effect . The trader that is multiple time period will be alert to this situation because there will be no higher time period tools setting up in the area . The great thing when this happens is that it quickly can be seen and you quickly can figure out that this is a pattern that is negative and that that there is no resistance/support in that area .

Article Source: http://depositarticles.com/

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Training Articles Via RSS!
Additional Articles From - Home | Business | Training
Sign Up for a free account.
Our other websites
All about SEO
Beauty Tips Forum
Submit Articles
Member Login
Link Us
Submission Guidelines
Ezine Notifications
Article RSS Feeds
Sitemap
New Stuff
About Us
Developer
Good shopping portal
Link to Us
Contact Us
Privacy Policy
Terms of Service

counter easy hit

Powered by Article Dashboard