Duration : 0:10:1

Technorati Tags: ABC's of Stock Investing, Andy Tanner, Bear Market, education, financial, investing lessons, Market commentary, Resistance, Rich Dad, stock market, Stock market education, Support, Technical analysis

I re-added an old trendline too.

Duration : 0:4:3

Technorati Tags: chart patterns, forex, futures, Resistance, stock market analysis, stock trading, Support, traders

Duration : 0:3:19

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Duration : 0:4:55

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Duration : 0:4:50

Technorati Tags: chart patterns, forex, futures, Resistance, stock market analysis, stock trading, Support, traders

In our last lesson we looked at how many successful traders incorporate support and resistance into their trading strategies. In today’s lesson we are going to expand on this concept by looking at how many traders look for multiple support or resistance levels when placing trades as well as how many chart patterns incorporate this concept already, providing traders with areas in which they can place their stops.

As we learned about in our last lesson, when setting a stop many traders will find a level of support if they are buying to enter the trade or resistance when they are selling to enter the trade and place there stop outside of this level. When entering trades many successful traders will also look for trades which have few if any levels of support/resistance in the direction they are trading, but several levels of support/resistance in the direction in which they are placing their stop.

Chart example:

As we have also learned in previous lessons, one of the key reason’s why traders favor or recognize certain chart patterns is because they often times signal what is next to come in the market. What is often overlooked however about almost all of the most popular chart patterns, but perhaps just as important, is their ability to point out potential places where you want to place your protective stop loss.

As you can see from the below chart the head and shoulders pattern is a perfect example of this. By entering the trade on a break of the neckline and placing the stop just above the right shoulder of the pattern traders ensure that there are at minimum two resistance levels in between their entry price and their stop level if not more.

Chart Example

For patterns such as the triangle pattern which do not already incorporate this multiple support/resistance levels between your entry and your stop concept, it is often wise to find entry opportunities which provide these additional levels naturally in addition to the setup when looking at the chart pattern in isolation:

That’s our lesson for today. In tomorrow’s lesson we are going to look at another way traders use to set their stops: Indicator based stops so we hope to see you in that lesson.

As always if you have any questions or comments please leave them in the comments section below so we can all learn to trade together, and have a great day!

Duration : 0:5:11

Technorati Tags: And, daytrade, forex, futures, howto, informedtrades, investing, Market, Money, Resistance, settingstops, Stock, Support, Trade

I just wanted to give you a quick update on what’s been happening in the markets over the last 2 days. Ever since we hit the 200 SMA Daily on the Dow Jones we’ve been consolidating in a low volume pull back. This can be potentially a bull flag, and today we saw the bulls pile in at support around 923 on the SPX (prior resistance becomes support). A continuation of the consolidation could happen over the next day or two until we hit the bottom of the ascending channel on the SPX, but we could start a new move higher tomorrow as well. I also look at GS today, which saved itself from breaking an ascending wedge. An ascending wedge does state that eventually we will get a reversal downwards, but you have to wait until the support is broken. The VIX on the other hand is moving in a descending wedge, and a break of that resistance would mean the start of a new move lower for the markets. In addition, I wanted to point out how the DUG (triple short energy ETF) was consolidating from the middle of the day yesterday in a bull flag channel, and broke out right at the end of the day, and so today’s move was very warranted!

Duration : 0:5:28

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Duration : 0:5:8

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Duration : 0:9:50

Technorati Tags: analysis, Chart, edition, forex, futures, Market, patterns, Resistance, Stock, Support, traders, trading, weekend

Duration : 0:7:6

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