KNOW YOUR LEVELS

Good evening guys. I am going to try my best to bring you a new blog entry at the very least 2-3 times per week. I would love the accomplish this both for myself and for the readers education. Teaching is one of the best ways to learn and I am still in a process of self mastery. I have a long way to go but hopefully this helps!

Today my post is about support and resistance. As a trader if there is one thing i could have told my younger self it would have been "spend most of your time studying support and resistance." This is truly the most important thing to me in a chart. Forget patterns forget indicators , yes these were aspects of the chart i used to focus on waaaay too much. Support and resistance will be the most beneficial thing to study. I call these LEVELS.These are the areas on a chart i call areas of interest. This is combination with a daily chart bias, a well set up plan for the day and observation of candle strength and volume will set you up for a higher probability of having a successful trade.  Lets take a look at the chart for FIT this Friday. First lets look at the daily.

Remember on Thursday when I was scanning for potential in play stocks for Friday what I saw was the powerful move on Wednesday and then the pullback on lower volume on Thursday. Looking at this chart i had an idea or a bias , that as long as we stayed above the emas 9 and 20 we could have a nice continuation long day on Friday. I had the idea for either a hold of support (which you will see later) or a gap up and go. In other words my bias was for a long based on the daily chart, Next I moved on to the intraday chart or 3 min chart in my case. I had my levels drawn which you will see. When when we opened on Friday morning you will see that the lower end of the levels were held, in other words , the support on the chart held , and aren't we taught to buy at support and sell at resistance ! well this is a perfect example. Support was held and a strong open set the tone for the day. If you were a risk taker or you were prepared you could take that long at the open, since support held nicely. If not another option was to wait for the lower volume pullback and then get in at the first sign of green. Remember since your bias was for a long you would have no hesitation getting into it on this pullback. 

If you took the entry long at the open or on a pullback you had a nice day. Based on your bias for the day you were handsomely rewarded with a nice trade. Levels are very important bc they not only help you know where to take the trade BUT they help you be disciplined. Just seeing those lines drawn visually will prevent you from taking impulse and undisciplined trades.