“ Keep a close eye on the trends in the financial market to boost your trading profits.”

As a newbie investor, the financial market might seem confusing and complex to you. There are so many challenges that you need to tackle down the line while maximizing your returns. Prices make a sudden shift in the market as soon as you turn your head away! Overlooking these changes can seriously impact your returns, so why make the big mistake? Identifying the past and current trends is crucial to stay ahead of the league. While a bullish market indicates a rise in prices, a bearish shows a slowdown in the movement of prices. Even though you might think that a bullish market is a sign of attractive returns, there’s still more to the picture! You can still boost your profits when the prices go down in a bearish market if you keep a close watch on the trends and make wise trading decisions. In this blog, you can explore the technical indicators that can help you identify and analyse the bearish resistance line.

1. Fibonacci Indicator

The Fibonacci is one of the most widely used support and resistance indicators. This indicator plots potential support and resistance levels as horizontal lines on the chart.

It is most suitable for the trending long-term options market as it foresees the areas where the price might continue to follow the prevailing trend. For example, you can predict resistance levels with a downtrend and support levels with an uptrend. 

 2. Pivot Points Indicator

Clear support and resistance levels are depicted on the chart by the straightforward pivot points indicator. Using the key levels of the previous day, the indicator computes three potential resistance and support levels. Additionally you can determine the direction of the market at that pivot point.

A bullish trend is indicated when the price trades above the pivot point and is probably going to respect the resistance levels. However, if the price is moving below the pivot point, a bearish trend is evident, and it will approach the support levels.

3. The Moving Averages Indicator

 Moving averages primarily display the prevailing trend by displaying the average price as a single dynamic line. Bearish resistance lines also present profitable trading opportunities each time the price retraces while trending. The moving average indicates an upward trend and provides support when it is below the price. In the meantime, the moving average displays a downward trend and serves as resistance when it is above the price.

When you add up the closing prices of your stock for each period and divide it by the total number of periods, the Simple Moving Average (SMA) determines the average price of the security over a given time period. It is especially helpful for figuring out entry and exit points, confirming trend reversals, and identifying support and resistance levels. You can either analyse the price movement with a 20, 50 or 200-day moving average line. This shows how much the security has averaged over the chosen time frame. Price movements in the security indicate an uptrend when they are above the security line and a downtrend when they are below the SMA.

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One way to profit from reversing market trends is to place trades based on the support or resistance level. The best chances for profitable short or long-term optionstrading arise when one can anticipate the support and resistance at extreme price levels. To enjoy smooth and successful trading, begin your trading journey with Options2Wealth right now!