Lesson 2: Support & Resistance ZonesSupport an resistance zones are critical in the market. These are the juicy spots from which market-makers get to feed themselves immensely. Many traders get trapped in these zones. Buyers are trapped when the market-maker's intention is to SELL and sellers are trapped when the intention is to BUY.
It very important for ordinary retail traders like you and I to be able to play the game the market-makers plays at SUPPORT AND RESISTANCE levels. This is how one can truly profit from the market. There's a lot of price manipulation going on at the S&R levels.
Market-makers are also in this business to make money. Unfortunately it is the retail trader who fattens their pockets. The good news is that this can be avoided through PATIENCE, PROPER RISK MANAGEMENT ANN HIGH LEVEL OF TRADING PSYCHOLOGY.
Things to avoid doing at SUPPORT & RESISTANCE levels:
1. Trading BREAK-OUTS instantly (a sure way to be caught in the opposite side)
2. Placing STOP LOSSES right on the zone (whipsaws will destroy you)
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I hope this bit of education will help you trade carefully at critical SUPPORT AND RESISTANCE ZONES.
HAPPY TRADING!!
