Monday, 8 November 2010

Part-time Trading - Part 2

I hope you realised that part-time trading is not as stressful as intra-day trading and much more pleasant experience.

Important factor to succeed in part-time trading is:
Support / Resistance and Price action - especially LONG TERM support / resistance and price action around that support / resistance

What we do is to wait for the price to move towards the support or resistance (S/R) in the chart. Depending on the price reaction near the key levels (S/R) we are going to trade (Buy/Sell) always in the direction of the market reaction.

If the price is moving up (uptrend / bulls), it reaches a top of that trend & then it collapses down (bear), that swing high we mark as resistance level. After few days (daily time frame) or week (in weekly chart), if the price again moves upwards towards that resistance, we look for a trade either to sell or buy depending on the price formation.

Conclusion: we draw support or resistance (level) lines in our charts (daily / weekly or monthly) and WAIT for the price to move towards our levels either to breakout or bounce to place our respective entry trades. as simple as that.

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