Higher Highs and Lower Lows

This is really easy to grasp. When there is a higher High, in another words when the price closed higher than the day before, this is a signal of greater confidence and a possible trend for further higher prices. On the flip side when there is a lower Low, this suggests that confidence is lowering and the price will fall.

In fact there are many books & courses that use this technique alone. Which to me is putting way too much trust in one signal. Plus, I think that a whole course based on what I have covered in one paragraph is somewhat of an overkill.

Just remember the above higher High and lower Lows to add extra weight to your trading decisions. As I have said before, this gives us just a bit of extra security in making sure that we have made the correct choice in trading Long or Short.

We haven’t finished by any means yet. My system has worked well for me for a long time. The moving averages above give me a clear graphical representation of price trends. The above higher Highs etc. clarify visually also that there is extra evidence to trade Long or Short. However I also add a few more signals that I have used for a long time that add even more argument to trading either Long or Short.

They are additional items that are once again freely available on most charting software and services. These additional tools are to be used to clarify a decision, nothing more. Not one tool is used on its own to signal a trade. It is the combination of our Moving Averages and all the extra visual tips and tools that we use.

I shall be covering these extra tools and techniques in the next few pages. Followed by a quick crash course in standard Technical Analysis. Nothing heavy or to worry about, just extra tips and tricks that will allow you to add even more weight to your trading decisions.

This entry is filed under academy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.