Technician
Education

Technical Analysis Basics: Trends, Support and Resistance #forex

FX:GBPAUD   British Pound / Australian Dollar
10231 views
181
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 http://thefxchannel.com

Comments

Core of technical analyses. If you master the above you are establishing a very solid and strong foundation for success.

Problem is that most traders are trying to ANTICIPATE trend change and not capitalize on excisting trends until they see proof of change (as stated above in the chart).
+7 Reply
Akil_Stokes bloodbath
I agree, I think many traders spend too much time looking for the "magic system" that will bring them money right away, instead of taking the time to really learn the basics.
+3 Reply
Technician bloodbath
Very true, this is the main issue, thats why they get lost.
Reply
Great post! It still amazes me at how many traders skip over the basics and head straight for the "magic system"
+3 Reply
Technician Akil_Stokes
Thanks Akil, Great to hear another expert agree
Reply
this sounds like a book from
Victor Sperandeo
+3 Reply
moorekapital jangseohee
@janseohee: Looks like ClearEdgeFX Violated TraderVic's TL Definition. There must be no price touching the TL between the two tow points: Low of Lowest Low && Low Of Lowest High Preceding the current highest Swing High
Reply
jangseohee moorekapital
@moorekapital, U r right!
+2 Reply
I think the red line pretty much says it all. It's either bouncing up or it'll break it and reverse. The current pin bar suggests another re-test of the recent high.
+2 Reply
one of the best explanation i liked it very much
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out