The farther away you are from your profit when you enter a stock trade the
greater amount of profit when you exit the trade.
This is why you need to be accurate when you enter the stock trade.
Entering at support levels and exiting at resistance level is key in
taking profits. When you have good volume at a support level then in
most cases the stock is going to move up. The demand is greater the
balance or supply so the stock has to go up in price. Watching the
size of the green or red candles on your charts along with volume is a
good indicator when the stock is heading. If the stock gaps away from
a price level is the strongest and represents the biggest supply and
demand imbalance.
When a stock stays at a certain level for several days it is being
accumulated and should be ready for a move up. Traders can look for
price levels where lots of trading activity is taking place and price
levels with lots of volume.
Less transactions means lower volume. You should look for levels where
very little trading activity took place with less volume. This could
indicate that the stock is not ready for a move.
Take a look at your charts to see how long the stock has stayed at
a certain level and how far once it moved away from that level. This
is how you determine where buy and sell points are located.
So the greater the profits when you buy at the lower level. Most new stock
traders lose all their money because they don't do enough research and
learn how to read charts.
When it comes to understanding low risk, high reward, and high
probability trading opportunities, a solid understanding of the core
concepts of supply and demand are the key to identifying where the
most ideal entries into markets are. The same is true if you are
shorting a stock the more sellers makes the stock go down.
You short and place the buy to cover where the support level is and the
buyers will but your short sell. When supply and demand levels are
small this is good news for the seller and increases the odds on your
short entry.
This becomes one of the traders profit targets which makes the reward side
of the equation which is more profits. |
