At vershine

Given that in recent years, many markets make strong rectilinear motion, it is necessary to correctly identify the test peaks. Let's look at a simple bar graph with the indicators and focus solely on price action.

Scheme one:
We should be able to hold a rising trend line, which connects a number of higher minima. Without exception.


Scheme two:
When a rollback to the upward trend, we have a horizontal line above the maximum fluctuation. It identifies and reminds us of areas of potential resistance from above.


Scheme Three:
As the price starts to come back up, we have a horizontal line through at least the last vibrations down to the potential support. Now we have three lines on the graph. The rising trend line is clear. The region between the two horizontal lines indicating the maximum fluctuation in the latter (the resistance) and the minimum fluctuation (support), it is a small trading range. Traders looking for opportunities to purchase, would use any method available to them to enter the ascending trend in the back. Those who do not have a method, use login "last resort", ie they buy on the breaking new high.


The purpose of the buyers who bought in the back, is to see whether the price increase above the first maximum of oscillation (ie to go above the upper horizontal line, which marks the resistance). We know that there are potential sellers, because they showed themselves before the roll began. If the movement is stuck there, some of the buyers close their positions and come out of the market. This is called Testing peaks. There are only three possible results:

1). The market makes a lower maximum variations in testing and not in a position to move forward.
2). The market makes a little higher up above the upper resistance line and unable to move forward.
3). The market breaks up to new peak and continue on.


Scheme of five:
Price made a new maximum. Buyers at the break, using the login "last resort" included in the market because the price moves above the maximum of the first oscillation observed upper horizontal line. Those traders who bought on the back, reached his first goal for profit and are in a waiting state. If the motion is not in a position to continue upward, they can record profits and get out of the market. Here there is a certain difficulty - when and how traders can learn, whether it was a good break up? At what point they will realize that the breakthrough did not succeed?


The scheme of six:
The answer to the question lies in the ability of prices to break up the range. If the price stops and is returned by the upper horizontal line, back of the first oscillation maximum, many traders begin to close their long positions in the fear that sellers have returned. Fixing of profits gives greater resistance, as the accumulated orders for the sale. Here, we find a small bar a day after the break - a pause, which can also be interpreted as a stop. Aggressive traders to make the sale of vibrations.


The scheme of the seven:
The next day, the market made a GEO-down under the first maximum of oscillation, because the price has not been able immediately to go higher. Aggressive sellers are now in short positions and mostly put their stop-order and above the new maximum variations made in the breakthrough.


The scheme of eight:
Quite often, the initial failure of traders interpreted as another setback and they are open long positions. While this can be a real setback, followed by higher prices, we would very much doubted, and not to buy until the sale takes place in the area between the two horizontal lines.


Scheme of nine:
A strong push will fail and a day with a great movement down. This is a time when buyers at breakthrough realized that they could be in trouble. The purpose of downward movement - the lower horizontal line.


Scheme of ten:
On another day testing support to the bottom of the range. The purpose of the downward movement achieved.

Forex Magazine
based on www.esignalcentral.com