Support & Resistance

• Look for price to fail the first test of any significant high or low horizontal level. But expect a successful violation on the next try.
• Rising or falling moving averages routinely mark significant boundaries.
• Trend line and channel breaks signal the end of a prior trend and the beginning of a sideways phase.
• Use central tendency to uncover ripe trading conditions but then shift to other indicators to identify low-risk entry levels and proper timing.
• Try using Fibonacci to see how far a rally or decline will likely pull back before reversing.
• Corrections routinely retrace at least 1/3 to 1/2 before support begins a new rally phase. Many trends pull back 2/3 before changing direction.
• Round numbers affect trends. 10,20,25,30,35,100,10000.