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Where sellers are strong enough to keep prices from rising further, you find resistance. Again, you don't care why the market or a stock is behaving this way, you just want to learn to trade this situation profitably. Look at the chart in Figure 12.15 to see that every time the price rises to the resistance level, the sellers start selling and the price is prevented from rising further. |
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Figure 12.15
Resistance Chart
Copyright 2000, TradeCast® Ltd. |
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Support and Resistance Lines |
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Drawing lines of support and resistance onto your charts can give you important visual information for making high-probability trades. |
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First, how do you draw these lines? |
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Support lines. Within the period you have selected, start a line from the lowest low, draw it up and to the low point preceding the highest |
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