Now you understand some basics about candle charts, you are ready to get to the heart of Technical Analysis and learn the tools required to identify the likely S/R areas at which to enter or open a position and the likely S/R zone at which to best exit or close it.
The first lesson in this course reviews price levels and areas where trends tend to start, pause, or reverse. We will show you how price levels are really narrow price bands or ranges, rather than specific prices, and how to find these on the charts. We will then discuss single trend lines and review up, down, and flat single trend lines.
You will then learn about channels, which are parallel trend lines that surround a rising or falling trend, and what the shape and angle of each channel can tell us regarding the price range. We will show how higher highs and higher lows define an uptrend and lower highs and lower lows define a downtrend.
Like simple trend lines and channels, moving averages (or MAs) are another kind of trend line that helps clarify the trend because they smooth out the gyrations of individual price or candle movements. We will examine the advantages of MA’s over simple trend lines and channels and their variations.
Suggested Readings:
http://en.wikipedia.org/wiki/Bollinger_Bands
http://www.investopedia.com/articles/fx/11/stages-of-a-forex-trend.asp
http://www.dailyforex.com/forex-articles/2009/08/Forex-Trading-Analysis-How-To-Use-Trend-Lines-/1930
