How to Make Money Trading with Candlestick Charts

Once a support trend line is broken,
not intraday, but on a closing basis, it
will function as a resistance trend line
from then on. Similarly, once a
resistance trend-line is broken on a

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closing basis, it will function as a
support trend-line from that point
onwards.
This is better explained visually in 
Figure
10.3
 and 
Figure 10.4
.
Figure 10.3:
Previous resistance becomes
support

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Figure 10.4:
Previous support becomes
resistance
Figure 10.5
shows the chart of Polaris
Software.

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Figure 10.5:
Support / Resistance lines in
Polaris
Notice the different trend-lines that can be
seen. Also notice that in December, the stock
tested the old resistance line. This time,
though, that line acted as support. If you are
now thorough with the candlestick signals,
you will recognize the bullish Harami which

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stopped the selling in December, right on the
support line. Please analyze the three signals
that are circled in the chart.
The trader should also be aware of the fact
that these trend lines are subjective. You can
draw a trend line which can be different than
the one I draw. After all, you are just taking
two or more points on the chart and plotting
a line through them. Then what is it that
determines which is the correct trend line to
be trading off?
Let the market tell you which the correct