A Beginner’s Guide to Trading: Understanding the High Price
The notion of high price might be difficult for trading newcomers. We shall define the high price, calculate it, and discuss its trading implications in this post.
The High Price?
Trading high price means the highest traded asset price within a time. Depending on the chart, this period might be a day, week, month, or other specified length. The high price marks the asset’s trading peak.
How is High Price calculated?
The asset’s highest transaction price during the designated period determines the high price. Candlestick charts, a popular trading charting approach, capture this price. The chart’s candlesticks denote periods, and their highest points signify the peak price.
High Price Significance in Trading
The high price informs traders and investors. It shows the asset’s greatest value throughout the selected timeframe, revealing market sentiment and possible resistance levels. The high price helps traders spot selling pressure where the price may struggle to rise.
Understanding the high price with other technical indicators and chart patterns is helpful. If an asset’s high price coincides with a big resistance level or a bearish reversal pattern, traders may consider short-selling or abandoning long holdings.
Conclusion
Beginners in trading must understand the notion of high price and its importance in price analysis. The high price is an asset’s trading price at its peak, revealing market emotion and resistance levels. Using the high price with other technical analysis tools helps traders make better judgments and improve their methods.
Sources and References:
Investopedia: https://www.investopedia.com/terms/h/high.asp
TradingView: https://www.tradingview.com/wiki/High
Forex.com: https://www.forex.com/en-uk/education/technical-analysis/chart-patterns/understanding-high-low-open-close-charts/