Charting Basics...Support and Resistance

Remember when you were young, and used to do those connect-the-dot puzzles? The ones with a bunch of numbered dots? You'd start out with number one, you'd go to two, and three, and so on. As you continued to connect all those dots, eventually a picture would emerge. Well, trading is a complex picture for many people. In fact, the reason why they don't even attempt to try it, is because it seems too big. It just seems like a conglomeration of dots all over the place, and they don't see any way that they fit together, but our job is to take complex things and help make them simple.

One thing we help you to understand is how a stock moves. What if you could figure out different pivot points, so you knew when a particular stock was going to turn and go up, and when it was going to turn and go down. Then, what if you were able to connect those dots into a picture that made a lot of sense, so that you knew when to enter a play, and when to exit a play?

When you see that a stock is moving down, you'll find that it hits what we call support. Support is much like a trampoline. When you hit a trampoline, you bounce back up. When a stock hits support, it bounces back up. But there's also a line on top that's called resistance. Resistance acts like a ceiling. When your stock hits that, it tends to move back down. Now, what if you could buy a stock as it was bouncing up, and then sell it before it moved back down? Would that make trading easier for you?

This is just one example of how we break down the confusing world of finance so that anyone can understand it. Trading doesn’t have to be a random conglomeration of dots. It really can be simple. We can help you connect the dots so you can see the full picture.