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Graphic cues are components that when combined, can create a better understand of near term market direction.

These cues include:
1. price channels
2. support/resistance levels
3. chart patterns
4. candle stick patterns

Price Channels

Price Channel
Price channels can be up trending, down trending, or horizontal.  Defining a price channel is directly dependent on the time frame of reference.  The above chart is a 100 day chart of WMT.  As the channel propagates, high probability trades can be made in the overall direction of the trend.  Note the severe price action at point 1 when the channel is broken.

Support/Resistance Levels

Support and Resistance
A support or resistance price level is a point of appreciable selling or buying interest.  Used in conjunction with other indicators, a buy or sell point can be identified to achieve optimal profit.  Holding through significant price levels can be dangerous; however, risk can be reduced with the incorporation of price channels, chart patterns, etc.

Chart Patterns

Chart patterns are graphical representations of supply and demand.  When chart patterns are considered, they should be considered on the merit of the underlying action, i.e. the "head and shoulders" pattern represents a pinnacle demand point followed by a "lower high" indicating an increase in supply.  Trying to find a "perfect" pattern is not only a futile attempt, but the more obvious the pattern is, the more likely it is to fail.  Chart patterns are useful tools, but it is more important to pay attention to what they mean rather than the perfection of the graphic.  Combine chart patterns with other indicators to increase your understanding of probable future price action.  See examples here.

Candle Stick Patterns

candle stick
Candle Sticks
Candle sticks are tools which can be used in an intuitive manner to evaluated the dynamics of price action
doji
Doji

hammer
Hammer

shooting star
Shooting Star

fractal
Fractal

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