Remember that the more you look at charts and apply everything that you are learning on this website, you will start to see price patterns that maybe only a few people can see. We can't stress how important it is to put attention to what the market is doing. Be also aware of what the market has done in past as there are many times where history repeats itself. It is just the way we humans are, it is all psychological.
||This is the price where maybe in the past the stock has found support (demand from investors).|
||This is the price where maybe in the past the stock has found resistance (over supply, investors are selling the stock more than they are buying).|
||What direction does the current stock have, is it going up, down or sideways.|
||Don't forget that the stock must have sufficient liquidity. If it doesn't leave it alone and chose another. Remember that share prices rise or drop until they find either support (investor demand) or resistance (investor supply). |
|2% top loss
||We have mentioned that if you do not want to deplit your investment account always use a stop loss before you get in a trade.|
||This term is widely used in the financial world. It is used when the market has been on a up trend for sometime and runs very fast like a bull.|
||This term is widely used in the financial world. It is used when the market has been on a down trend for sometime, the market is showing signs that is slowing down.|
||This is the same information that brokers see on their screen. It shows that number of buyers and sellers and when the price is matched the business is transacted.|
Rule of thumb: Once support line has been broken, it becomes resistance. Once the resistance has been broken it becomes support.
Remember: Support and Resistance zones are like an imaginary wall. Once the wall has been broken, price is able to move through quickly.