š
How to draw Support and Resistance Lines - Indicators, Earnings Gap (Day Trading Beginners $ROKU) - YouTube
Channel: Humbled Trader
[0]
Drawing your major support and resistance
lines with this 3 step process, is the simplest
[6]
way to find out whether the stock is a long
or a short intraday.
[8]
How to draw support and resistance lines in
day trading.
[11]
I know iāve done a video on a similar topic
before but Iām going to really slow things
[17]
down today and take you step by step through
how to draw out these levels and applying
[21]
them when trading intraday.
[22]
Iāll also be going over some quick and simple
way I use my indicators.
[24]
So by the end of this short video, youāll
be able to draw support and resistance levels
[30]
that actually matters on your stock charts.
and analyze the overall trend of the stock
[36]
in the simplest way possible.
[37]
So if youāre a beginner or novice trader
looking to learn technical analysis and drawing
[38]
price levels, this video is made for you.
[39]
Iāll also sharing the story about my trading
mentor from years ago, who taught me almost
[44]
everything I know.
[45]
So if youāre interested in hearing the story.
[47]
Then keep on watching.
[48]
And donāt forget to always destroy that
like button for the Youtube algorithm.
[53]
Thank you very much!
[54]
Alright guys letās dive right into it.
[55]
When I draw out my levels for any stock, be
it small cap penny stocks or mid cap large
[60]
cap stocks.
[61]
I always always start drawing on the daily
chart first.
[64]
The daily price and volume levels are the
most significant.
[68]
And why is the daily chart the most important
tool?
[69]
To answer that question we must understand
what exactly is a candlestick chart.
[74]
The chart is basically a visual representation
of major transactions, both on the buying
[80]
side and the selling side.
[83]
So this chart maps out the price levels and
where that big money decide to buy.
[89]
And the reason i say big money is because
itās the funds, the banks, and millions
[94]
of dollars going in and out of the stock that
can actually move the price of a stock such
[101]
as $ROKU.
[103]
This company has 16 billion market cap.
[106]
So to move the stock 5% up or down you needā¦hold
on
[111]
So basically you need about 2600 worth of
lambo money of either buying or selling to
[120]
move this stock 5%.
[122]
And That's what i mean by big money.
[124]
They are the money that can cause major selling,
which creates resistance levels.
[131]
And vice versa, where the big money buys up
the stock, create support.
[134]
So let's draw some lines.
[136]
The first thing I i always do is mark out
the price levels that show major volume break
[142]
out on the daily chart.
[146]
Daily Volume tells you is the amount of shares
bought and sold on that day.
[151]
And when we see major volume break out on
the daily, that means those areas are where
[157]
the big money in the past decided to buy or
sell this companies shares.
[161]
Ok so now that weāve drawn out major price
levels that had volume breakout.
[166]
The second thing I look for is whether or
not there are gaps on the daily chart and
[171]
mark out those levels as well.
[173]
Because if you think about it.
[174]
There had to be major selling or buying from
the big money to create that overnight gap.
[184]
Usually these visual gaps on the daily are
caused by fundamental catalysts like earnings
[189]
or FDA approvals or fails.
[191]
If you look at ROKU, these icons on the bottom
of thinkorswim daily chart are when they had
[199]
earnings report.
[200]
And whether the company beat on earnings or
fail earnings, that fundamental news drove
[206]
the big money to buy and sell, hence creating
these visual daily gaps.
[212]
And many times these visual gaps match with
the volume break out too.
[216]
So lets go in and mark out those levels
[219]
Missed earnings, funds decided to get out,.
[221]
Beat earnings, big money see more upside so
they pour money back in.
[224]
the value of the stock is determined by the
company earning potential.
[230]
So if this publicly traded company said in
their conference call that they expect to
[235]
be affected by the trade war and sales will
decrease in the next quarter.
[241]
That means their revenue will decrease they
canāt make money for their shareholders.
[248]
So that's why almost always see big money
movement after each earnings.
[253]
Ok so after marking out the lines on that
daily that had major volume and cause daily
[263]
gaps, the third step to drawing key support
and resistance, is to smash the like button
[268]
if you haven't done that already.
[271]
Iād really appreciate it.
[277]
Ok the third step, We want to go in and adjust
each horizontal price level.
[282]
The rule of thumb is this, you want each price
line to have touched these candles multiple
[288]
times in the past.
[290]
Why?
[292]
Because like I said earlier, these charts
are a map of historical transactions that
[298]
happen at these price levels.
[301]
And we want to see multiple buying and selling
had been done in the past around those lines.
[308]
Thats hows us, thats the level the big money
is using.
[312]
So usually I want the lines to have touched
at least 3 times.
[314]
So let's do some adjustments here.
[315]
Once youāre done, a very quick and easy
way to double check whether your support and
[317]
resistance lines make sense, is to flip the
daily chart to the weekly.
[322]
The chart should still look very clean.
[324]
And I want to double check that the lines
still land on major volume breakouts.
[331]
And still have touched the candles multiple
times in the past.
[335]
So you can add or move them here if you want
to.
[339]
When Iām swing trading for more than 2 days,
I use the levels especially on the weekly
[346]
chart.
[347]
Ok so now that we have support and resistance
lines charted out.
[352]
Lets go over some indicators i use in the
charts.
[354]
And if you want to see how to use daily support
and resistance lines to trade intraday, check
[360]
out these two videos.
[375]
I donāt trade intraday with 200SMA, like
i said this is just a general guide on the
[383]
And these Indicators only āworkā if the
masses know them, and use them.
[388]
Thats why i think its so funny whenever people
tell me they have this secret indicator, and
[393]
theyāre not going to tell anyone.
[395]
Or they are going to package the secret indicators
in a $5000 dvd.
[404]
If only you and your neighbor know the indicator
and use it, its not likely to work.
[424]
Like Iāve said many times in the past videos,
donāt rely on indicators or chart patterns.
[430]
If you rely on them youāll always be one
or two steps behind.
[434]
Iāve read many times in the comments that
the way i describe charts and price levels
[440]
are similar to how Forex traders do it.
[443]
And that is completely true.
[445]
In 2016 I was mentored by a forex trader his
name is Orane.
[450]
He started first in forex trading then moved
on to trading penny stocks using the same
[456]
methodology.
[457]
He was sharing many free video lessons and
ideas on a well known penny stock community
[462]
site run by a well known penny stock guru.
[467]
All his insight on the stocks and psychology
is what caught my eye and I started following
[473]
him.
[474]
But of course, eventually he got banned from
this guruās site, because he was sharing
[480]
free ideas and videos that were much much
more useful than the guruās $5000 alerts
[488]
and dvdās.
[489]
So after he got banned he moved on to work
as a hedge fund manager.
[495]
And the fund started an educational program.
[498]
and that's where I followed him to from 2016
to 2017.
[502]
The program was expensive, that's where my
lambo money went.
[507]
But it was worth every penny.
[510]
The training program no longer exist now because
he has moved on from trading forex and stocks
[520]
and on to the next new venture for himself.
[523]
But we are still in contact, and hopefully
iāll get to interview him on this channel
[528]
one day.
[529]
But the way he taught me about psychology
and how to use it to analyze daily support
[536]
and resistance lines was truly transformational
in my own trading.
[541]
This method of charting and set up makes things
simple and very clean to read.
[545]
I donāt use anymore indicators besides those
I mentioned in this video.
[550]
That way I can focus on price action, trader
psychology, and how the candles are reacting
[556]
to each support and resistance levels, instead
of spending the time to check whether all
[560]
the bollinger bands, RSI, MACD and the stars
in the universe line up.
[576]
If you find this video helpful, please drop
me a like and subscribe.
[581]
I create quality day trading videos here every
single week.
[586]
Like I said before, my mentor came from a
forex background.
[590]
I donāt trade forex, but I did find some
basic forex videos that explain support and
[597]
resistance further.
[599]
Iāll leave them in the description below.
Most Recent Videos:
You can go back to the homepage right here: Homepage