[li][B]First Law[/B][LIST][/li][li]Newton�s first law of motion states that a body at rest will remain at rest, or a body in motion will move in uniform motion, in a straight line, [U]unless[/U] acted upon by a force. Newton’s first law is also known as inertia or in other words a body’s resistance to a change of velocity or direction of motion. It was Galileo who first realized that a force was not necessary in order to keep a moving body traveling at a constant velocity, and that a moving body would continue to move in a straight line, at a constant velocity, unless acted upon by a force such as, for example, friction or air resistance.[/li][/ul] [/LIST][ul]
[li][B]Second Law[/B][LIST][/li][li]Newton�s second law deals with the acceleration of a body. Newton�s second law can be stated as follows: The rate of change in a body�s linear momentum is proportional to the force applied to the body, and the acceleration will be in the same direction as the applied force, i.e. [I]F[/I] = d([I]mv[/I])/d[I]t[/I] = [I]m/I = [I]ma[/I][/I][/I][/li][/ul] [/LIST]The different factors that determine the velocity and directional intensity of a security in a respective direction, including technical analysis, fundamental analysis and basic human greed and fear are the same that contribute to the slow down, stall or ultimate reversal of a currency, as such creating an area to be regarded as potential/established Resistance (Bullish) or Support (Bearish).
Price action will always be found doing three things: Rallying, Declining or Consolidating.
[B]EG:[/B] If you have a 3 year HIGH that has been tested X amount of times and has not been broken you can “assume” that once the price reaches that level three things are possible directly:
- A Break
- A Reversal
- Consolidation prior to 1 or 2
We do not know whether 1, 2 or 3 will take place first, but we know that one of either will become a fact in time. What we have the power to do is educate ourselves to assimilate the information on the chart in a manner, which gives us an edge in providing more accurate feedback and making more probable scenario conclusions.
All we do is make professional guesses. The reason we practice is to make sure that we guess right more often than we do wrong. When you combine that with basic money management you have a formula which equates to consistent gains… thats what you need to succeed.
Demo trade as much as you can, so that determining market reaction becomes a 6th sense.