Thursday, October 18, 2007

Next step: Resistant


Resistant means lines that show the points where the market will try to make a back move.

When the candlestick touch the upper resistant, we assume it as a sell position, and when the candlestick touch the lower resistant, we can set it as a buy position with expectation that the market will stay on the range between the high and lower resistant.

There only two possibilities when the candlestick touch the resistant:
  1. The market will make a back move, if it was going down, it will be going up; if the market was going up, it will be going down.
  2. The market will try to break the resistant and making a new higher or lower range.

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