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TRADERVISION Trader Talk> Easy Trades For Newbies
If you're newer to technical trading and you're thinking something like...'Geez Man! I can't trade, it's too complicated with too many numbers, and squiggles, and lines and mumbo-jumbo, and yibber-yabber it just gives me a headache.', not all hope is lost because although trading, much like life, can be complicated it can, like life, be simple, it's just a matter of the approach you use. For instance one of the most basic technical trade strategies is to 'Buy Support, Sell Resistance' which means to Buy when price is at a 'Support' level and to Sell when price is at a 'Resistance' level. 'Oh great' you say, ' so how the H.E. double hockey sticks do I know what a 'Support or Resistance' level is?' Well to know that you just need to observe 2 things:
Firstly that price tends to move away from, and towards levels of support and resistance, and these moves can often leave behind relatively thinly traded ranges of price commonly referred to as 'Gaps', so to find a Support or Resistance level is just look for where a gap in price is.
Secondly in order for price to maintain an average amount of trading at different prices if it does move quickly through a range thereby creating what's called a 'Gap' it will tend to move back into that range later to trade through those levels so that an average amount of trading is maintained, a process referred to as a 'Fill of a Gap'.
Knowing these two basic technical fasts about price gives you all you need to know to execute technical trades. When price moves into a gap to 'fill' it with more trading you simply Buy the support or Sell the resistance level marked by the bottom or top of that gap and sit back and watch it go. Easy Peasy. No complications, no headaches.
Jan. 29> The ADX has been buried below the 20 for a few weeks now and is reaching an extreme low so some price expansion may be imminent. If the ADX rises and RSI is able to retain the 50 level it would be a Buy, if the RSI loses the 50 it would be a Sell.
Long targets would be 2675 / 2700 / 2750
Short targets would be 2575 / 2550 / 2525
Feb.14> After coiling around the 120 level for 6 years price may be closer to expanding away from this range than staying within it. Last year's bounce [ GRN CRCL ] is the most positive price move in years and occurring this late in the triangluation is a potential signal of an eventual breakout. Best case scenario would be if the 120 level remains support. Note that the 2007 RSI downtrend is extremely extended and therefore may be due some violation.
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