Support and Resistance
If you look at charts of price movements, it often can be
seen that the peaks and troughs of the market are built
practically on the same slope (and sometimes horizontal)
lines. Such lines are called support and resistance lines.
Line resistance (Resistance): lines that carry on
significant market tops. Number of times greater than their
market peaks confirms the line, the more "powerful" it
becomes. That is, the market shows that the level of prices,
marked the line of resistance is very important and the
market and reaching "saturation" is repelled from it.
Line support : These
lines are built the same lines of resistance, but
are on the troughs of the market.
At a penetration down the support line it turns into
resistance. At a penetration up line of resistance,
she turns into support.
Channel line
Quite often, prices range between support and resistance
lines. Then a movement known as channels (Chanel). If the
channel lines diverge, it is a divergent channel, if you
agree, then converging.
Graphic reversal
On the charts price movements from time to time produced
some of the formation, after the appearance of which, the
market in most (but not 100%) of cases are in a certain
direction. Such formations are called figures or graphics
model.
Head
and Shoulders (Head & Shoulders)
This model, after the formation of which the market moves in
the opposite direction.
The key point in
determining this figure is the neckline. This line is
constructed from the hollows at the base of the head. Just
break through the schedule of this line after the formation
of the second arm said that in front of us head and
shoulders.
This model has a very useful feature for the trader. The
fact that the largest pieces you can determine an
approximate (minimum) market movement in the opposite
direction. That is, determine the purpose
of (Target) market movement.
The purpose is
defined as the height of the head from the neckline, delayed
from the point of penetration in the opposite direction.
As
a confirmation of certain figures head and shoulders using
the volumes of trades.
Double (triple) top / bottom (Double
top / bottom)
This is just the reversal figure. However, it belongs to an
unreliable market signals, since it gives many false alarms.
For screening used Divergence on the oscillator and the
testimony of the volume.
V-shaped top and
bottom ("spike" or Spike)
The model is formed, usually after
rapid previous trends. On the chart a lot of gaps, there are
practically no levels of resistance / support. Reversal is
produced as a key item or a fracture of the island. The only
signal for the trader can serve as a breakthrough very steep
trend line.
Figures confirm the continuation
of the trend
Triangle (triangle)
General rules of analysis of
triangles:
• in a classic triangle should be five lines from
the entrance to the triangle (three down and two up,
or vice versa)
• if the price is above, then a
strong position to continue the price down
• if the price is lower, the stronger position to
continue the upward price
• if the angle of the triangle pointing up, the
price will go up soon
• if the angle of the triangle is pointing down, the
price will go down soon
• The more lines in a
triangle and closer to the top out of it, the
stronger and more significant will be the price
dynamics in output, but if the output happens in the
last quarter, the subsequent motion is likely to be
sluggish and unstable
• breakthrough occurs, most likely between 1 / 2 and
3 / 4
• vertex of the triangle will be in the future serve
the level of support - resistance
• The amount decreases as the formation of a
triangle, increasing sharply after the break
• after a breakthrough price will be in the
direction of the breakout, as a minimum distance
equal to the height of the triangle to the greatest
part
Flag (Flag)
The figure consists of
two parts.
Shaft - ideally formed by one or
two big bars. Cloth - formed as a
remedial undulating motion.
If at the tops and bottoms of the
correction to the line resistance and support, you
get really very similar to the flag. The breaking of
the cloth is usually in naprivlenii previous trends.
Goal - the flagpole height, delayed from the point
of penetration.
Pennant
This is a special case of
shape flag. Only as a piece of cloth in it stands a
symmetrical triangle.
Wedge
The figure is similar to the triangle.
The difference is that the line bounding the figure in the
same direction but at different angles. The figure is often
formed on the corrective movements and breakthrough occurs
in the opposite direction of the slope of the figure, ie,
toward the main trend. In the case of education shapes
against the trend, the penetration may indicate a trend
reversal.
Rectangle
The rectangle is very similar
to a triple top. To determine the species formed
shapes using oscillator analysis and analysis
pomoschbyu volume measures. After breaking the price
will be in the direction of the penetration distance
not less than the height of the rectangle. Edge of
the rectangle in the future will be good levels of
resistance - support.