Summary: Technical Analysis Part I
Ok, now that you have read the lesson material and taken the quiz, please make sure you completely understand and/or do the following:
This chapter is a simple introduction to technical analysis, for advanced students it should not have taken much time to read and understand all concepts covered in this lesson.
For novice students, re-read all sections, especially both sections about support and resistance (you will be using them a lot).
Make sure you understand the following:
Support and resistance, these two concepts are amongst the most important subjects of trading so you need to pay special attention to section 3. What happens to supply and demand around these levels?
Understand what each candlestick reviewed in this chapter suggests.
Ok, here are the answers to the Brain Feeders:
Brain Feeder 1
We were asked: how do we think the market behaves when the supply for one currency meets the demand for it?
It simply goes sideways. That’s right, it doesn’t go up or down, it moves as a straight line because there won’t be incentives either to sell it lower or buy it higher.
Brain Feeder 2
We were asked what would happen if the market breaks a support zone with the demand curve?
It will have a shift to the left; here is how the chart would look like:
What was considered “low”, its now considered “high”.
Ok, not its time to take the quiz!