Monday, 22 April 2019

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F Forex Course

Active Areas

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Clearly, the only clues that can give us the market are logically derived from the price action over time.

In this respect, always said that the market has memory and... ! is true.! A direct consequence of that this memory is the continuous repetition of certain "zones" that we will call "activity areas", where the price, is likely to behave, once again, as it has already done so at other times. I.e., returning to "draw" resistances and supports already used previously and likely to be used, again, in our operative daily for obtaining profit. Hence, our trading system is based solely on the management of resistances and supports already contrasted.

The resistors are areas where the upward trend pauses. The supports are areas where the downtrend pauses.

The upward trend is formed with supports and top resistances (to the support) that excel themselves.

The downward trend is formed with support and top resistance (to the support) that do not excel themselves.

1. Main features of the resistances and supports:

  • In an uptrend if not overcome resistance is easy to start a downtrend. By contrast, in a downtrend, overcoming resistance announces the possible start an uptrend.
  • Resistances and the supports exchange their functions, that is, if a resistance is exceeded, it automatically becomes a holder, and conversely, if it exceeds a support becomes in a resistance future.

2. When a resistance or support loses its effectiveness?:

  • By the time: Every break resistance or support must be maintained over the next 2 or 3 sessions to consider as final rupture.
  • The distance traveled: For a resistance or support is regarded as overcome is necessary that the price exceeds a certain percentage (marked by us) the level of resistance or support, or at least the close of the session is above/below the support or resistance overcome.

3. "Activity zones" or support and resistance lines:

  • "Activity areas" are "zones" where it is possible the shift of trend to be composed of resistances and supports.
  • To draw a line is necessary to have at least 2 points of resistance or support. From these points draw a horizontal line joining them. These lines have to be changed every time a support or resistance is exceeded.
  • It is important to draw the lines according to the term we use for our operative. Not the same short-term operating that the medium to long term. For example, if we operate the short term use a graphical minutes to obtain lines.
  • Not all support and resistance are equal. The higher the volume, the more important will this line.
  • More time act as resistance or support, more reliable the price reaction when it breaks or overcomes them.
  • It is important the distance traveled before reaching new resistance or support lines. The greater the distance traveled  more time will take overcome the new resistances or supports.

4. Resistances and supports that make up "activity zones" allow us to know:

- Points where to buy and sell. - Placing stop orders near these points. - Confirming the trend of the market and, therefore, to take advantage. - To know in which areas it is likely that there is a change in trend.

In summary, to our operative of "activity zones"-composed of resistances and supports-are our philosopher's stone and can NOT, under any circumstances, operate outside them. Never try to figure out what will make the market because we are NOT interested in the slightest. Only we will operate with our resistances and supports, as only reliable references

Different forms or ways to get our "activity zones":

1. Drawing horizontal lines. 2. Charting guidelines and horizontal lines. 3. Using indicators "Max" and "Min". 4. Using indicator "Swing".

Finally, remember that, to know the supports and the relevant resistances is a necessary graficar every day. Graphing, let us know the support and resistance that will constitute the possible "zones" where to get "short" or "long", it is to say, going to be the "activity zones", where we will have the "obligation" to "enter "the market, if we want to operate.

Author: Traderpirate.com

Erick Gálvez
Author: Erick GálvezWebsite: http://www.asdforex..comEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
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ASDForex manager and professional trader since 2008. I am also Aleforex.com manager where you can view the services that I give
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