My goal is that by the end of this video, you'll have a more fundamental understanding of how to identify and use support and resistance, as well as three powerful secret techniques that you could use to power start your trading. Also, all I ask for in return is that you hit that like button and also comment something below if you'd like more of these videos with secret techniques in them. Of course, if you haven't subscribed already, don't forget to hit that subscribe button for more short, sweet and simplified videos on how to trade the stock market. Ok, so secret number One is always used the more cautious Support and Resistance line.

For example, if we take a look at Tesla's chart, we see some support retain at about the mid 3 40s for multiple days. But if you were to buy into a position thinking there was that level of solid support, you would have had a rude awakening just several days later. But if you blow up the chart, you could actually see that the more cautious line to declare support at was actually it's two week long support just over 290. Now, if you had declared support at 340 for the multiple day period, you would have been right technically speaking, but it doesn't matter because that support line broke and then we saw a Down trend to long-term support.

So in order to keep the odds in your favor, you're going to want to declare support as cautiously as you can. Now this means that if you're looking to get into a position and make sense to declare the lowest consistent support over a longer term period, Now what this means is that if you're looking to get into a position and make sense to declare the lowest consistent support for at least a multi-day period, and if you're looking to get out of a position, it makes sense to cut your losses at a more cautious level of resistance and support as well. Now, when it comes to resistance, the same thing, well, you want to maximize your profits and that means getting out as close to resistance as possible. You also want to minimize your risk and that means picking a resistance line that is as cautious as possible.

Now, in the context of Tesla if you look at the past three months or so, we see this sell-off from roughly 370 and then a gap up roughly 50% of the way to previous resistance. that means that now the older resistance is thrown out and this has now been declared as new resistance now. I Know a lot of traders will look at this chart and would look to buy. This next step would be like ok, great resistance is that 380 and I'm going to buy and hold to 380.

But this is not a conservative nor a logical strategy and it's not going to be consistently profitable in the long run. It might work for like a trade or two, maybe 10, but if you're consistently using these strategies and you're practicing sloppy trading techniques, then that's just it's not going to work in the long run. I Think that the reason for this mishap is that new traders tend to declare the highest point of whatever time span that they're looking at as resistance. And that's just not logical at all because different time spans will clearly have different highest points, and just zooming in on one timespan doesn't change the price action over the other periods.

So do not just declare the highest point on a given chart as the highest level of resistance or as the level of resistance, because that's just that doesn't make any sense. That's not how the stock market works and that's not how price action works. You need to consider all of the different time periods and you need to select the most conservative, the most conservative level of support and resistance. Now that doesn't mean 180 day, but we are going to be talking about how to factor that in later in the video.

But what that does mean is that you're going to want to take the most cautious. You're going to want to look at the multiple day charts and you're going to want to. and if you take it a swing position, longer than that, but you're going to want to look at the charts and then you're going to look for the most consistent line of support and resistance and then choose the more cautious option. Now with the latest dip, guess where I'm going to be declaring resistance.

Not even here where it dropped, which is where many would declare resistance, but at the more conservative level. That way the odds are more on our success and we have minimized our risk to losses. Okay, Secret Number Two, Secret Number Two is to consider multiple lines of support. I'm going to be describing this using the catcher's Mitt analogy, which I'll explain in a second, but to introduce the idea, with Secret Number One, you're declaring the more cautious line of support.

and with Secret Number Two, you're also considering what is happening in the long run so that you have a broader scope of price action to base your decisions off of as well. So in a way, secret queue kind of builds off the knowledge that you that you learn in Secret Number One. So for example, if you're looking at Ford and are trying to take a multi date position, we need to first figure out where support is so that we know what our downward potential is and compare it to our upward potential to see if it's worth it to take a position. So if we pull up the 20-day chart, we can see short-term multi-day support at about 822.

but long-term support seems to be at around 7:45 So if you're taking a day to multi day position, you should put priority towards declare and support cautiously at 8:22 But also note that if it breaks support that could be a sign of a larger reversal to its 20 days support level. Thus, if we see a break below support at 8:22 that means you're now a lot more exposed to the drop all the way back down to 745. This is important because a lot of people look at support as sort of this unbreakable line I Look at it as sort of a catcher's mitt, and if it can't catch the price action, then the price action is going to fall towards longer-term support, which is a stronger catcher's mitt. Likewise, that mitt can also break, but it's less likely than the first one to break, and thus, for all intensive purposes, it's a stronger mitt.

That being said, it's important to note that these mitts are subject to break and drop the price action at any time. It's really just a matter of leveraging your capital to minimize your risk and utilizing the catcher's mitt aka different levels of support when you're taking a position. So really, what I'm getting at with this secret number two is that you need to utilize. You need to utilize multiple levels of support.

And this is especially true with day trading positions. As it is with swing trading positions, you need to make sure that you're leveraging your capital correctly. Okay, great Secret number three: This secret is really focused on leveraging your probability of success against your probability of failure correctly. I Think this is one of the biggest things that people get wrong.

Now if you're what: If you've watched my trade recap videos, you know that I frequently only hold to 75% of previous resistance. Now this is something I Get a lot of angry comments from because people are upset that I'm leaving 25% of so-called probable profit on the table and others think it's way too conservative of a strategy. But there's two major reasons to do this. The first and the most obvious is that selling out 75% of the way to resistance means that you're selling into price strength.

That means that you are selling ahead of everybody else while the stock price is still going up, so everybody else is planning to sell out resistance. and thus it's easier to execute out of your positions because if you're selling it when everybody else is selling, then obviously you're not going to get the best execution point. When you place markets orders at resistance, you're at a large risk of executing a decent amount lower and slower than if you sell what everybody else is still buying up shares. Now the second reason goes back to keeping the odds of success in my favor.

While if you find the right patterns, the odds can be strong that the stock will meet previous resistance. The odds go way up if you set the barn lower and execute out of your position at 75 percent of the way to resistance. It's also more likely when you factor in your many trades over the long run, because when you sell out at 75 percent, you'll also be able to profit off many stocks that follow a downward staircase pattern of consistently lower highs. and you can also adjust the 75 percent to whatever works that.

Whatever percentage works best for you, 75 percent is obviously not a hard line. it is for me, but everybody has their own trading strategy and I highly recommend applying different percentages and seeing what works best for you. However, I Always recommend selling into strengths and that means that you're going to need to sell out before resistance. I Do not like to be the catcher's mitt myself, and that's why I always like to sell out before resistance and I highly recommend that you do that as well at least 90 percent, but ideally 75 percent of the ways to do you can benefit in the long run anyways.

I Hope that these secrets and tips were useful for you I Think that it was fair to call them secrets because I think the vast majority of traders and especially new traders don't know about these techniques and a lot of them just kind of like scope over them. So I hope that this was a valuable video for you I Highly recommend joining our Facebook group. A lot of my videos are inspired by questions that I got within the Facebook group and we have a pretty good community in there. I Also just started posting nightly watch list with all the stocks that I'm going to be trading or at least watching in the next day and I post those the night before and the only way that you can access that is by joining that free Facebook group.

They also have a lot of great discussions and I think it's a really good learning opportunity for everybody that's involved. anyways. I hope that you like this video and as always I'll see you in the next one. but don't forget to hit that like button and also subscribe if you haven't already and have a great week folks!.