How to trade on Support and Resistance
Support
and resistance are the two major and most important terms in day
trading.
Support - support price is the base price for the
stock price. If this base price breaks then there are chances for stock price to
come down further.
As the name indicates support, it is the support for
stock price to prevent it for falling further. But if the support price breaks
then the stock price may slide down further.
Resistance -
It is just like the stoppage for the stock price rally. In other words
resistance is the price level where stock price comes and halts before its
forward rally. If the resistance level is broken then the stock price may move
further upside.
It is just like speed breaker for the stock’s price
rally.
How practically support and resistance are important in day
trading
The first rule in day trading is “Don’t do wrong
trade and expect the stock price will move according to you”.
Be
realistic you will get success.
So don’t buy or sell expecting stock will
move above resistance level or will fall below support level.
Watch the stock
price carefully and once it breaks the resistance then enter into trade (buy) or
vice versa for support.
Note - In day trading always try to buy and sell.
Don’t try to do short selling and then buy; do short selling only when
you
are very sure about that stock.
Disclaimer: Information presented on this site is a guide
only. It may not necessarily be correct and is not intended to be taken as
financial advice nor has it been prepared with regard to the individual
investment needs and objectives or financial situation of any particular person.
Stock quotes are believed to be accurate and correctly dated, but
www.intradaystockstips.org does not warrant or guarantee their accuracy or date.
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Make use of Support and Resistance
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