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The one thing we like most about charts is that there is
no "opinion" involved. In other words, what
you see is what you get. If a stock has moved up to say the $100
level 3 times and got repelled each
time and now it's back to 99.88, it is there in "black and white"
for all to see, and it is either
going to bust through and make a nice run or it will get repelled
yet again. No opinion, no talking
heads, no guessing, nothing. It will either breakout or fail again.
You cannot "alter the picture",
so when you pull up a chart, it will show you exactly what has
happened and on that information you
can watch for the breakout. Learning how to play chart patterns is
very important for us as traders, so please learn all you can about
it.
This next point is one of the single most important items involved
with making successful chart
trades. If a stock is testing a resistance level, such as in the
example we used above, it will
certainly help to have the "market" behind you when you are looking
for the breakout. Remember that
in day to day life, sector strength and overall market "tone" are
the most important aspects of
trading. In other words if the DOW is down 275 and the NASDAQ is
down 100, what are the chances XYZ
is going to bust through that resistance level and run? Not much
really. On the other hand if the
DOW is up 175 and the NASDAQ is flying, XYZ very well could squirt
through that old resistance and
make a great move higher. So, paramount in trading chart patterns is
to try and align a great chart
with an "up day". This will greatly enhance your chances of scoring
home runs!
For more FREE trading tips, enter your email address at:
http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826
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