How to identify support and resistance in day trading

 

Day traders are one of the most popular and successful ways to make money in trading, but they may also be one of the most elusive. Day traders aren’t just for the feet — they can also be successful investors as well. If you’re serious about trading and creating wealth, then you need to get your head around day trading. Day traders aren’t going to magically appear for you one day — they’ll need to guide their way through a lot of obstacles in their path first. Biggest challenge: You cannot expect to day trade successfully if your entire approach is based on profitability, precedent, skill, and knowledge of markets. Today’s market is so much more complex than ever before that it will require unique strategies and insights not even a seasoned trader can provide. If you think long-term thinking or don’t have good market experience, chances are you won’t be able to succeed when it comes to day trading— even if you try your hardest. Support systems: A support system is essential if you want to succeed day trading permanently — but even with plenty of help, even a seasoned trader will likely struggle to find the support she needs on a consistent basis. The more experienced you become, the better equipped you will become to manage your own supports — but for newbies who just start out, there may be some hurdles ahead as they develop their own support system

What is support and resistance?

These are the two most common levels of support and resistance in the market. They help you identify buying or selling areas and help you distance yourself from sentiment that could lead to losses — even though you’re trying to profit from it. The more common the trend, the more common the resistance and the more common the support. You can find these levels of support and resistance at many trading events, including major news events like the S&P 500’s rising trendline and the Federal Reserve’s decision to raise interest rates.

Why day trading works

Daily trading is the most common form of investing. Traders make a profit by buying and selling a specified set of assets on a daily or weekly basis. The advantage of daily trading is that you can predict what will happen the next day and be able to take advantage of any profits you make. Additionally, you can set up a system so that when a market is in a certain state, you’re only as likely to make a purchase or sell position as to have no influence on the direction of the market whatsoever.

What are the risks of day trading?

Hate trading? Ditch the gridiron: Day trading has its own little risks, which are discussed below. These risks do not appear until you’re in your 30s or 40s and start to spend more time in the marketplace. Your natural urge to consume is likely to be strong during this age — so be mindful of your dietary intake and limits! Additionally, day trading is often associated with high levels of stress, anxiety, and stress-related diseases. These may include high blood pressure, high cholesterol, high rates of anemia, and countless other conditions and diseases.

Bottom line

There are many advantages to day trading, but there are also some risks that go along with it. While you might make a fortune in a few years, day trading can also be a risky business. You will almost never know if a trade will work or not, and the best you can do is follow the trend from one day to the next. If you’re not careful, you can end up making very little profit from each of your trades. This is why it’s wise to evaluate your overall abilities each day and make adjustments as needed. If you’re able to identify support and resistance in your day trading, you can use them as a guide and avoid making mistakes that can have far greater consequences.