5. Day Trading Lesson 5: Support and Resistance
www.informedtrades.com The fifth lesson in a series on technical analysis for active traders of the forex, futures, and stock markets. Just as anything where market forces are at play, the price of a financial instrument in the stock, futures or forex markets is ultimately determined by supply and demand. Very simply, if demand is increasing in relation to supply then price will rise, and if demand is decreasing in relation to supply then price will fall. As we have learned in previous lessons, what you are basically looking at when you see an uptrend on a chart is an extended period of time where demand has continued to increase in relation to supply. Similarly when looking at a downtrend you are seeing an extended period of time where demand has decreased in relation to supply for an extended period of time, causing price to fall. Similarly, in a downtrend, demand is continuously falling in relation to supply which causes the price of an instrument in the stock, futures or forex market to fall. In this lesson we are going to look at something known as support and resistance which are price levels where the supply demand equation is expected to change, and price is then expected to stop moving in the direction it was moving previously, or reverse direction.
Video Rating: 4 / 5
Tags: Lesson, Resistance, Support, Trading
Multiple points of resistance add a lot of power to the trade. It’s great to set a stop loss 30 pips or so below major support / above major resistance.
Invest in forex and earn money.
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support and resistance = trader’s best friend?
THanks!
Great job,thanks.Free Forex EA - works perfectly fine for me..
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David
Great info. Very well explained. Makes it much clearer. Have tried reading books re technical analysis and it either bores me to death or just becomes too much information. Thanks guys!!!!
awesome.crisp and clear
thx man. You have that unique way of explaining things and each time I understand instantly.
thanks for making it so clear and simple!
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thx
Hi Dave, I’ve recently purchased Technical Trading Tactics by Person, Market Wizards by Schwager, and a couple of Gann books. Are there any other good titles you can suggest for a newbie?
There seems to be so much to learn, it’s hard to know where to start, incidentally Investopedia I’m finding is another great net based resource.
I have an investment in RBS on the LSE and am kind of identifying trends and profit opportunities. I’m getting ticker data from my PDA whilst doing my day job, and am getting really frustrated as I’m missing opportunities to make serious money, as I can’t watch the figures all day. I am lacking the knowledge and confidence to quit the job and take the plunge, although slowly I’m moving towards making that goal happen. Net based courses like yours are a real help, so thanks so much for uploading.
I enjoy this video =) it makes me really horny!! T
Hi Hurtubey, Thanks for the comment I am glad you like the videos. I think most traders would agree that the patterns I am outlining are relevant on anytime frame.
Best Regards, Dave
Hi Dave, great to see all your videos.
I have a question: Is it possible to detect the same patterns on the 15 min or 30 min charts as you detect them on the daily charts? or even in the shortest time frames available?
(5 or 10min)
Thanks and great job sharing your knowledge
Hi Waterpig916, Glad you like them and thanks for helping me spread the word! Best Regards, Dave
This is an great demonstration, will inform my collegues of your website.
this sounds just like overbought and oversold to me..
Thank you Dave for your response. I will check it out.
Hi, sorry to bother you with something out of the blue, but I am trying to record myself videos from my PC navigation, with my voice on them, and publish them afterwards at YouTube. I have a software called Jing but it works with SWF files and YouTube doesn’t accept them, do you know how can I record a FLV file from my computer navigation? Thank you so much for any help you can give me with this
Hi Jaguar 265, Glad to have you. What I would recommend if you are new to trading is going to the InformedTrades site and clicking on the “free trading course link” there you will find a free video trading basics course that has all my youtube videos organized by title. The lessons on trends are in the first module. Let me know if you have trouble finding them. Best Regards, Dave
I am new at trading. Is there a lesson on how to draw trend lines?