Understanding Chart: Up Or Down

 Welcome To Chart Analyzation

Are you interested in chart analysis? Want to know the secrets behind graph fluctuation? We are here to help you with that. We have come next to you with some fundamentals on which the graph works, the same graph where one can make thousands to millions just by letting know when and where the graph goes. 

• Reason Behind Graph's Fluctuation

Hey, do you know the reason behind the graph's ups and downs is none other than the buyers and sellers? Shocked! Yeah, these are the buyers and sellers who decide whether today's graph goes up or down. But it doesn't depend on one or two buyers/sellers, it depends on millions of buyers and sellers who are trading in that particular stock whose graph is fluctuating.

• Support And Resistance

So let's understand how the graph works on two main factors: Support and Resistance. This works on the demand and supply method.

Support: Whenever a large number of traders buy a stock at the same level then demand for that stock at that particular spot level increases which leads to an increment in its price too. By which, the graph directs upwards. So, the minimum spot level from where the graph turn in the upward direction is known as Support.

Resistance: Whenever the graph is going upward, then a huge amount of traders who are holding this particular stock for a very much time will sell it and it increases its supply at that particular spot level. So there is a huge supply in that particular stock and buyers are fewer, which results in a decrement in the graph. So the maximum level from which the graph starts to come down is known as Resistance.

• Sideways Trend

Whenever a chart does not cross its previous support and resistance levels for a long time then it is come known as Sideways Trend.

• The Psychological Factor

Yes, a little bit of psychology also works in graph prediction. How? Let's see.

When I said to you above that after hitting a resistance graph goes down but where does it stop? It will stop on a support level. But why does there a support level formed by the buyers? Because there is some psychology behind it. Whenever it comes down, traders think that it will go up again and a huge amount of traders put a buy on that stock. And it goes up!

And that's how a graph works.

Moral We Can Learn: Life Goes On With All The Supports And Resistance.

Thank You