Technical Analysis Basics: Trends, Support and Resistance #forex
What is an Uptrend:
Uptrend: A series of higher highs and higher lows. Each highs surpasses the previous high and each low is either above or equal to the previous low.
If you are able to spot this structure on any chart, then you can clearly say the trend is up.
The opposite is true for a downtrend.
How the trend is reversed?
A break of the structure of higher highs and higher lows is the main threat for an uptrend and could lead to a reversal from an Uptrend to a Downtrend.
Note that its not always the case some times the trend resumes to create a new highs or move in sideways manner.
Support and Resistance
Support and resistance levels are simply those highs and lows that you draw on the chart. For example. The latest higher low in the chart above is the most important support level in the uptrend. Why i say the most important? because simply if the price breaks below that higher low, the the structure of higher highs and higher lows is no longer intact, as we will have a new low that's below the latest higher low as shown on chart. Read(2) on chart.
If that happens, a trader should be very careful, as the price may create a new lower high now somewhere below the latest high and resume the move lower to create a new lower low.
My best regards
Technician
Subscribe to my trading portal thefxchannel.com
Uptrend: A series of higher highs and higher lows. Each highs surpasses the previous high and each low is either above or equal to the previous low.
If you are able to spot this structure on any chart, then you can clearly say the trend is up.
The opposite is true for a downtrend.
How the trend is reversed?
A break of the structure of higher highs and higher lows is the main threat for an uptrend and could lead to a reversal from an Uptrend to a Downtrend.
Note that its not always the case some times the trend resumes to create a new highs or move in sideways manner.
Support and Resistance
Support and resistance levels are simply those highs and lows that you draw on the chart. For example. The latest higher low in the chart above is the most important support level in the uptrend. Why i say the most important? because simply if the price breaks below that higher low, the the structure of higher highs and higher lows is no longer intact, as we will have a new low that's below the latest higher low as shown on chart. Read(2) on chart.
If that happens, a trader should be very careful, as the price may create a new lower high now somewhere below the latest high and resume the move lower to create a new lower low.
My best regards
Technician
Subscribe to my trading portal thefxchannel.com
