Hubert Senters here.
Let’s talk about the importance of paying attention to good old-fashioned support and resistance. Now, unfortunately most people use support and resistance the wrong way. They think of it as a pinpoint laser accurate point on the chart. That’s not what support and resistance is. It’s an area of interest.
So what we’re going to do is I’m going to look here on Amazon as you can see this right here was previous support and resistance so let’s start here. This will be the most recent support right there. I’m looking at that and you can see it sold off again bounced off of here and then it went lower.
So if you’re just going okay, I’m going to buy a right here then. Well, I don’t know about you. That’s a deep little retracement there that you’re going to have to deal with. So the way I do it is I don’t usually go at the day of high and the day of low. I will use them as areas. But what I do is I use a slightly different tool and I will go okay, in this area. I know that I’ve got some support.
So I may want to be a buyer down in this area same type of situation up in this area. I know I have some overhead resistance and I can be a seller in that area. So when you’re doing support and resistance it is important to make sure that you have a risk reward ratio that is in your favor and not the market’s favor.
And remember you don’t play the sucker’s game and be stopped on every single trade. So it’s an area of interest is not a pinpoint accurate support or resistance area. What’s more important is the zoneyou’re your risk reward ratio.
Good luck. Hope it helps. And I’ll see you on the next video.
Hubert.
