Support areas are super important to understand. To do so, you must know how to spot them, draw them on your charts and use them for your protection and spotting of high probability trade setups, notes Marina 'The Trader Chick' Villatoro.
So, what exactly is a support area? Basically, in layman terms, it’s the floor of a trend. The bottom.
The Support area is a floor that is formed by pivots (price action) hitting over and over again.
Anything more than 3 pivots is considered an area, so when you have a continuing one, it becomes a strong area.
The minute you see it hit 3 times, put your breaks on and do NOT enter!
When you see it hit more than that, stay out altogether until there is a massive breakout either above the area with total confirmation, or massive strength going in the opposite direction of where the resistance area is.
It is also super important to draw your areas as simply recognizing it doesn't matter. You need to draw it, so that it's there for you to see.
Here’s a video to have a much better understanding of how it works.
Bio: Marina ‘The Trader Chick’, specializes in helping people to Day Trade with confidence and ease. She simplifies the process by completely breaking down the art of identifying high probability trade setups. Get this FREE Trading Cheat Sheet to help you get started.