To trade, you need to have two parties: The buyer and the seller. If there are more buyers than
sellers, it results in a demand greater than the supply. This imbalance will result in upward
pressure on the price of stocks, which will persist until the imbalance is corrected. If there are
more sellers than buyers, it means that the supply of the stocks is greater than the demand. This
results on downward pressure on the share, which will remain until equilibrium is regained. Whoever
exerts the pressure is said to have control. If you are doing short term trading, it is extra
important to know how to spot a change in control when interpreting charts.
Commitment
The response of the market to the rise or fall in share price indicates commitment. As stocks are
traded, we can discern something about the emotions of the traders. Those who continue to trade in
spite of high prices, show that they believe in the future of the stock, the result is a high price
for the day. This is bullish trading. The opposite is true for low trades. It tells us that sellers
are worried about the future; therefore they continue selling their stock in spite of lower prices.
This is bearish trading.
Conclusion
Charting is not a crystal ball. Charts do not foretell future market behaviours or predict stock
prices. What charts do exceedingly well though, is offer you a concise and accurate history and
patterns DO tend to repeat themselves. In the history lies a trend and it is from this trend that you
may extrapolate data on which to base your projections of the probable future market behaviours and
stock price changes. Therein is the greatest value of using charts.
The minimum amount required for opening a ForexGen Live trading account is $2,500 for standard
Account and $250 for Mini Account but the recommended minimum investment size is $10,000 for standard
Account and $1,000 for Mini Account. That is because of the high leverage and the extremely volatile
nature of the Forex market.
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