Support and Resistance are the building blocks needed in order to read chart patterns properly and to trade effectively.
-A psychological level where people believe the demand is strong enough to hold the stock price up
-This is similar to a price floor, but it isn't government controlled
-A healthy support line hits multiple points at the same level
-It is the opposite of support
-A psychological level where the sellers are putting the stock down
-When a stock hits the resistance line, buyers no longer want it because the price is too high, and sellers step in
-The more times a stock hits the resistance line, the stronger it is becoming
Support and Resistance are the Same:
-Support is actually resistance and vice versa
-They both equal one another
-i.e. once the stock breaks through the resistance level, the resistance line becomes the support line
-Resistance lines continue to become support lines as the stock continues to go up
-The same is true on the downward level; support lines become resistance lines as the stock goes down
-The more trading that is done in a certain level, the stronger that level becomes
-Support and resistance do not have to be horizontal
-They can be elevated at different angles and still be support and resistance lines
-If the support or resistance is broken that means the perception of the stock has changed
-When stocks tank, people are selling their shares and they want less of that stock
-If stocks have a lot of resistance and break through the resistance line, there is a high demand for the stock (new product, positive news, etc)
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Sasha I'm studying to start in trading and I find your videos amongst the most helpful on the internet. This one in particular made the light bulb go off in my head concerning the psychology of the movement of stocks. Thanks a million!
Say I draw a line at the most recent top/bottom so a major reversal Im guessing l would have to wait for a second bounce off that area to be considered a valid s/r area and not just like a touch and actually bounce correct me if I'm wrong thank you
Sasha , you are so young , but your teaching is very good. I am old and want to learn investingf or the first time. What materials should I buy for a beginner. I know nothing about trading but like to learn. I also have no skill in computer ,too. What sofware should I buy that very easy to understand.
Ok let me get this straight, this is something I never understood about technical analysis, you're supposed to draw lines on your charts and base part of your trading on that?
I apologize for the dumb question, just that want to learn technical analysis and I'm a bit confused when people present old charts as examples.
Let's say a trend breaks the resistance level which in turn changes to support... Is there a theoretical percentage above the new support line a trader can use to predict where the new resistance level would be?
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Systems and Equipment.
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Public Emergency Services.
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