that buyers were unable to push price up by much. But that is not how candlesticks work. In the image below you can see the first candle in the reversal trend closing far from support. Resistance Sell Area The terms sellers and bears are interchangeable. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. On the gbpusd chart below, you can see price is approaching the blue shaded area.3500. The Preceding Trend A preceding trend is a strong move by the bears/bulls heading into an area of support/resistance. You will generally find that there are 5-8 support and resistance areas on most charts.
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If you have a strategy that works in low volatility markets, it will fail in high volatility, ranging, or trending market conditions. In this case we saw a transition of power from a bullish preceding trend to a bearish reversal trend separated by a stall on resistance. Above all, Price Action keeps your trading simple. Areas in which price has stalled or reversed more than once. The key to reversal trading, or any trading for that matter is getting in at the right time. How can you trade comfortably using should i trust forex traders make a year a chart like this? Each pattern has a set in stone definition and that is the only meaning it can have. Preceding trends are pretty simple.
As long as you see a strong move heading into an area of support or resistance, you can consider it a preceding trend. When price approaches a sell area large amounts of sell orders are triggered countering buy orders. How can you trade efficiently using a chart like this?