Page 10 - Module 5 - Key_Players_in_the_financial_game

Module 5 – Understanding the game between the bulls and bears

finding and drawing resistance
Whenever you are
looking for the latest
levels of Resistance you
start at the right of the
chart where the market is
trading and work your
way back to the left. As
you look for Resistance it
will be like climbing a set
of stairs. You will be
looking for higher highs.
After you find the first
high, the next high going
back must be higher.

what is a support?
A support level is a price level below the current one, where the demand was stronger than supply,
driving the price upwards. Demand is synonymous with bullish, bulls and buying.

At a support level, general expectation dictates that demand will outstrip supply, so a fall in price
would be slowed down by the time price reaches that level. Consequently, the price is expected to
bounce back upward because support is the price level at which demand is thought to be strong
enough to prevent the price from declining further. The market, understood as the will of millions
of investors, considers a price level low enough and acceptable to purchase, so when the price
reaches that value, purchases soar. The logic dictates that as the price declines towards support and
gets cheaper, buyers become more inclined to buy. As demand increases, prices advance higher.

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