Chart Reading : Lesson - 2 (Part : 3)

We did not finished yet our Support and Resistance lesson. So, ar ektu pain dibo. Today, we will discuss regarding Dynamic Support and Resistance. Please look at the below chart :

(Pls. click on the image to enlarge)

Don't think it's a Holy Grail. It's a nothing but a moving average. The above chart is our DSE General Index.

Usually, people takes two different periods of moving average and crossover of the two different periods of moving average gives them buy/sell signal. [Like EMA (10) for short period and SMA (20) for long period. Some people take three different periods like EMA (10) for short period, SMA (20) for mid period and SMA (50) for long period].

This time we've taken a single period of moving average [say SMA (20)] to determine the support in an up trend and resistance in a down trend.

Finally, chose your moving average (SMA, EMA, WMA, etc) and its periods carefully. Please, don't ask me for the best one. In share market, nothing is best. So, chose it as per your trading strategy. by JC