TRADING SYSTEM - Support and Resistance Systems

  Systems that are based on support and resistance depend on an active determination of the underlying trend and then take action depending upon the trend.  In a market that is trending higher, these systems will buy when prices decline to predetermined support levels, while in a declining market, they will sell short at a predetermined resistance levels.  The success of these systems is a direct function of how accurate the determination of trend, support, and resistance have been.

   Below is an example of how one can apply the resistance system to make three profitable trades everytime the price reaches the resistance, as shown by the blue arrow.  Each time a profit of about 40-50 points could be made.