Spot High-Confidence Trading Opportunities Using Moving Averages

By Elliott Wave International

The moving average is a technical indicator which has stood the test of time. It's been 27 years since Robert Prechter described this vital tool in his famous essay, "What a Trader Really Needs to be Successful." What he said then remains true today: Continue reading "Spot High-Confidence Trading Opportunities Using Moving Averages"

Gold Chart of The Week

Each Week will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

Weekly Gold Report (July 1st through July 5th)

The second quarter of 2013 came to a close with a decent rebound in the US Stock Indexes. A three day up-move was the result of favorable consumer spending, housing, and unemployment numbers. Despite the move up, it was not an easy week to predict market movement, nor was it a week to feel comfortable in a trade for more than a half day. This is because last week’s schedule of economic reports was punctuated daily by FED Members that now have the ability puppeteer global markets with one interview. Even though the FED decided to keep rates unchanged and maintain their Bond buying on a monthly basis (QE), the interviews that followed the decision had the potential to negate the initial response to the rate decision. Last week required the attention of traders each day as one FED Member after the next was asked about their thoughts on whether or not Ben Bernanke and Co. would begin to scale out of QE sooner or later. My opinion is that the scaling back has already begun. Continue reading "Gold Chart of The Week"

Gold Chart of The Week

Each Week will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

Weekly Gold Report (June 24th through June 28th)

Selling pressure carries over from last week to begin the last five trading days of June. If the FOMC statement weren’t enough for market bears, China added fuel to the fire with alarming overnight news from their banking sector. With a busy week ahead of economic data, coupled with a daily dose of speeches from US FED members, we should have enough news to give the markets some nice volatility to trade. Continue reading "Gold Chart of The Week"

Trader's Toolbox: Support and Resistance Revisited

Although many of you will find this lesson in one of the most basic concepts of market behavior "old hat", it never hurts to review. One of the first things a new trader is told (I hesitate to say learns as many never do) is to buy a breakout above resistance and sell a fall through support.

Resistance is the level which holds a market down, while support is an area which props up a market much like a ceiling and a floor. The key is to identify the critical levels. There are a number of methods to determine support and resistance: trendlines, moving averages, retracements, Gann angles, etc. However, simple observation can be an effective means of locating the important areas. A quick glance at the October cotton chart reveals the most basic levels of support and resistance (broken lines).

A previous high often provides resistance, while an earlier low tends to offer support. Support or resistance levels are not necessarily flat. For example, trendlines reveal areas of rising support or falling resistance. Also, when broken, uptrend lines offer a new level of rising resistance, while the opposite is true for downtrend lines. In fact, virtually any broken area of support will become resistance and vice versa. After breaking a level of support (or resistance), the market commonly comes back to test that level before resuming the downmove (upmove). This may be the single most effective method of locating low-risk entry points for trading purposes. This lesson may seem like wasted space to the experienced. However, it is amazing how often traders simply forget (or ignore) the power of basic support and resistance levels. This concept can be very profitable, but it may be just too "easy".

Finding an Edge with Support and Resistance

Today I would like to introduce Karen of Wealth Wizard World. Karen is an experienced trader who took an interest in the markets at a very young age has continued since then. Through her own blog and website, Karen shares what she has learned in her twenty-plus years and today she has agreed to share this knowledge with Trader's Blog readers as well.


I’ve traded for many years - about 20 to be precise. During the early years, I read everything I could get my hands on and tried several methods. The lessons learned were not what to do, but what not to do, and yet I was looking for something more.

There are lots of indicators to use and chart patterns to watch. What bothered me was that I realized that indicators lag. They respond to the movement of price.

Chart patterns work very well for some people, but they didn’t do much for me. I saw several head and shoulders patterns break to new highs; flags, pennants, and wedges break opposite of what they were supposed to do. What was an eager, studious, young trader supposed to do?

Continue reading "Finding an Edge with Support and Resistance"