I always heard people said this support, that resistance level ...etc, but never ask them how that was figured out
From past levels of congestion in price levels depicted in graphs, prior highs/lows, and the like. (These days, computers and software i.e. Trade station, calculate these for you and can identify them, quite accurately actually).
For further and more detail explanations get some of the following books:
"Techincal Analysis Explained" ----- Martin Pring.
"The Futures Games" -------- Tweles/Jones.
"Trading for a Living ------ Dr. Alexander Elder.
"Technical Analysis from A to Z" -- Steven Achiles (of MetaStock fame)
In addition, there is a thread here in SI: "Point & Figure Charting"
Subject 5671
It seems... (I only have started studying this one, so don't ask.... as I can't tell)... that they are very accurate in determining trends, resistance, and support points, so take a look.
There is a book by Tom Dorsey that seems to explain quite well such charting methodology. (I just ordered it, have not gotten it as of yet, only read reviews.)
Anyway.... go to Amazon.com, I am sure you will find all the above books.
Now... a proviso... Technical Analysis, while helpful, in my eyes, it contains a little bit of Voodoo, meaning there is a lot of interpretation, that allows you to become... shall we say, an "Artiste" (please pronounce with French accent).
So there you have it. You ask, that's my opinion. A mere guideline.
Oh yes, don't flame me, as you don't have to believe me.
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