Candlestick Charts and Trend lines

support lines and barrier lines for candlestick graphs

Shown as an upward-sloping support line, at least the need to connect an upward bounce to the point of the line, this support line shows that during this time, the purchase is more active than the seller, positive, because in the gradual rise of the new low point, can also lead to fresh demand. This line signals that the market is in an upward trend.

Shown is a downward-sloping barrier line that requires at least two downward-bouncing highs to link out such a line. The blocking line shows that during this time the sellers were bolder and more aggressive than the buyers, because at the new highs, which were gradually declining, they still attracted the sellers ' willingness to sell, a straight line that reflected the market was in a downward trend.

The strength of the potential of a support line or barrier line depends on the following aspects: The number of times the line has been successfully tested by the market, the amount of volume per test, and the length of time the line remains valid. is shown as an upward-sloping del barrier line. This is a trend line that joins the rising highs. Although this trend line is not as popular as the upward sloping support line, it is also a valuable research tool for bulls. When the market approaches such straight lines, bulls should take precautionary measures to prevent the market from falling down here.

is shown as a downward-sloping support line. This type of straight line is not often used, but in some cases it is very useful for short selling. Specifically, this downward-sloping support line is a sign of the downward trend (which is illustrated by the downward sloping slope). However, if the market succeeds in sustaining such support lines, then the short-sellers should take precautionary measures to prevent the price from bouncing upward.

the form of low-rise anti-rising and anti-falling form of breaking high

As shown, the market once broke through a barrier level, but unable to maintain the situation, so prices back to the past highs, forming a "pseudo-breakthrough." Under such circumstances, we should sell short and the market will again test the bottom boundary of the horizontal whole range. This kind of false upward breakthrough, constitutes the so-called "broken high anti-falling form". If in the formation of high-breaking anti-falling form, while forming a bearish candle chart indicator, it is really a good chance to sell short.

At the same time breaking the high anti-falling form is the opposite of the broken low anti-rise pattern, in the low-rise form, the price has at first broken down the previous location level. Later, the price bounced back, returning to the top of the support area that had been breached. In other words, this new low level cannot be maintained. In this case, once the price is pushed back above the past low level, it should be bought.

Why is the broken low anti-rising pattern and the broken high anti-falling form has the magical effect? We might as well think of the market as a battleground between two forces (Ushigata and Xingfang). When the market is in the level of the trading range is, the two sides norm scramble for the site is particularly clear, this is the level of the zone. The horizontal barrier line above it is the last line of defense that Xingfang (to be sold at this point) must be collected. The horizontal support line below is the last line of defense that Ushigata (to be bought below this line) must keep.

Sometimes, the warring party, such as large traders, business account managers, and perhaps even proprietary traders, will expel small stocks of "scouts" to test the opposing forces land determination. For example, Ushigata may push up a push (buy), attempting to raise the price above a block line. If the Cattle scout team can camp on local land (that is, within a few days, the market's closing price is at the top of the barrier line, the buyer's market is larger than the seller's), then Ushigata's upward breakout succeeds. That is, the market has turned the old block into a new support area, and for that reason, the Ushigata forces will control the market situation.

Polarity Conversion principle

The past support level has evolved into a new barrier level, and the past barrier level has evolved into a new level of support, which is what we call the "polarity reversal principle". The magnitude of the technological potential of this polarity conversion phenomenon is proportional to the following:

1. The number of times the market has tested past support/blocking levels.
2. The size of the volume, the volume of the position, at each temptation.

　　, a steep sell-off in late December ended at a level of $5.53 (at point a). At least three categories of participants may consider buying when the market is again testing this level.

　　The first group of market participants may be those who have been waiting for the market to stabilize in the sell-off in late December. Now, they found that the market was supported again, so they got an honest reference point of $5.33 (point A, December 28). A few days later, the support level successfully withstood the temptation of the market, in the process, a lot of the market has attracted new bulls to join.

The second group of market participants may be those who originally held long positions but were closed in the sell-off in late December ....

The third group of market participants may be those who have bought at a and b. They also noticed a rally from B to B1. Therefore, if there is an "appropriate" price, they may be able to raise the existing position. At c, the market returns to the level of support, and they naturally get a suitable price point. So at C, there was more buying. And so on, when the market is back down to D again, it will naturally attract more bulls to the market.

But soon the Bulls ' troubles began. In late February, prices went down through the levels of support formed at a, B, C and D. Those who used to buy in these old support areas are now at a loss without exception. They certainly want to get rid of these loss trades at the lowest possible cost. When the market rushes to these long-bought areas (around $5.53), it is time to take a long position on the flat fight back. As a result, market participants who bought at a, B, C, D, may now be sold. This is the main reason for the past support level to evolve into a new barrier level.

Candlestick Charts and Trend lines