How to find support and resistance when day trading? I'm sure this is a question many beginner traders are asking, because every time i asked my ex for support, all i got was resistance in this video i'll show you guys how to draw out the correct supports and resistance levels step by step when day trading, finding The right support and resistance levels is crucial and should be a part of the foundation for technical analysis, whether you are day trading stocks, crypto futures or even forex as a full time day. Trader i'll also be sharing some tips for utilizing these technical levels. When trading short-term volatility, so if that sounds helpful to you, make sure to gently tap the like button and you will magically get more support from me without the resistance and bad jokes. So what exactly are support and resistance? Okay, no more jokes! This time around, i promise i don't want to torture.

You again support levels are areas on the charts. Historically speaking, when this price sold off to those same price levels, the stock bounced off and people came in to buy the stock. So that's why, on the chart you see, the stock typically would have bounced off a similar area like here here and here many times in the past before, because there's a market to support a stock whenever it's sold off to those price levels. Remember a market where they were talking about the stock market, crypto markets, futures or forex is made up of buyers and sellers, so a support area is where more buyers came in to buy than sellers.

On the other hand, resistance levels like these are price levels where sellers came in to sell the stock. So, whenever the stock came up to these areas right here here and all the way up here, sellers decided to take profit and get out of their position and there were more sellers than buyers. Okay, so now that we all have a basic understanding of what support and resistance means, let's go in and draw the actual price levels step by step now, step number one: when drawing support and resistance, you are looking for the extreme highs and the extreme lows. So on the charts over here, where do you see the extreme highs and the extreme lows that we talked about right? The very obvious extreme highs all the way up here, old-time highs around 159 dollars.

You have another extreme high around the same area 155 and you have another extreme levels up here right here here we are seeing like these uh, these uh upside down, v shapes or or w shapes when you're looking on the chart. So you can see this is the tip of the v shape, and then you have another tip right here. So those are the extreme highs and down here you see some of the previous levels as well. Extreme highs here highs here and all the way up here.

So these are what we call resistance areas up here: you're looking for the most obvious levels, the highest levels that stand out, and this will work the same way when you are drawing support lines, you're. Looking for the extreme lows, so you can see here, you can see like a v shape here on the chart. This is a support area right here right, the the inside the extreme lows of the v shape another one down here, because you see and the v right here and then your v shapes or w shapes. You know all these areas are support areas because that's the extreme lows before the stock, you can see bounced off once twice a couple more times and went up to the resistance areas that we drew out so up here around the 140 three 145s area.

You have another support area because you have a small v shape down here. Right you can see this will be another extreme low. So that's another support area for the stock. The reason we want to use the extreme highs and extreme lows the v shapes and w shapes is because we want to find the most obvious level that the market and the majority of the people see and use we're not trying to find some secret hidden line.

On a daily chart, it's the opposite right. We want to use what the big funds, the big picture, big buyers and sellers use and use those levels when drawing support and resistance. Okay. So now that we have the lines based on the extreme highs and extreme lows, the next step for us step number two is to make sure that these lines have touched a few candles at least two or three times in the past.

Before, generally speaking, the more times a support or resistance line has been tested in the past before the more powerful it would be, and that would be the same case for resistance levels. You can see now that we're trading near all-time highs, there's a resistance level around the 156 area. That's been tested once twice three times over here, so that's a pretty strong resistance and we are still holding up down here as well. We can see a resistance level around this extreme high right here right around the 122 123s area, that's being tested once over here, second time again and the third time, that's when it succeeded and broke out above that resistance.

So, while you're on step number two, you can go in and adjust all the lines you've drawn from step number one. So i can come in here and move the lines around to make sure that they have indeed touched the candles at least two or three times in the past, the more touches or more contacts you get from the candles that will be even better remember. That would mean the levels are stronger like we talked about earlier and that's really the essence of support and resistance levels. These are not some magical price levels that the candles just bounced off was sold off.

For no reason these lines the technical levels, they represent significant price areas that people decide to come in to buy or sell. So that's the reason we want to make sure to charge that out when we are day trading now. Moving on to step number three - and this is more of a very important tip - i have for the beginner new traders when you are drawing support or resistance levels, you want to make sure that you're zooming out to the daily chart or the weekly chart. I know this may sound counterintuitive or doesn't make sense, since we are day traders.

Sometimes we close out the trade in 5 minutes or 30 minutes, but it's actually very important for us to see the bigger picture a lot of times. I see many new traders focus on just the intraday time frames such as the one minute two minutes or even the five minute chart. But you need to take into consideration all the support and resistance levels from the hourly chart daily chart. And if you are swing trading, you want to look at the weekly chart, so remember always to zoom out and use a big picture when you are drawing support and resistance.

Now, let's move on to step number four - and this is another very important tip for the beginner new traders - is to treat these supports and resistance lines as a general zone of buying and selling. It's important for you to understand that the support or resistance levels you draw out, or anyone else draw out for that matter. It's never going to touch exact to the cent. Generally speaking, the higher price and the more volatile the stock, the bigger the trading range would be - and this is especially true for low float stocks.

For example, you can see this support area for amd this one's at 102, but diankia is around 100, so for amd. Sometimes the support could be off by one or two dollars, and that would be normal for the stock. However, if we look at a completely different stock here, tesla this one is a lot more expensive than amd about three times more and the range for the support and resistance would be very, very different as well. It's a lot higher so on the charge you can see the support area.

Here, i would say, let's say a thousand dollars, there's a range between 1019 and down here, 987 dollars. So that's more than 20 30 points range for this rough support area on the daily chart, and it's the same up here you can see. This is a rough area of support for tesla stock and this the low of this day was around a thousand one hundred. Fifty eight and down here the previous day, a thousand one hundred forty six.

So that's the difference of ten points, but still in the same area of support, same thing down here for resistance up here. The resistance was around 1104 and over here right same area of resistance. This one is 1116, so that's where you get a range of at least 10 to 20 points for tesla stock, again always draw out the support and resistance on the higher time frames. The daily chart, the weekly chart or the hourly chart and draw out the most obvious levels, the extreme highs and the extreme lows, and don't forget that these levels should have touched three candles or more in the past before this method of charting out support and resistance Makes the charts very clean and easy to read when day trading and that's all i need to day trade every single day, just simple support and resistance, alongside with sometimes v-wap and volume, so i don't need to rely on any fancy or gazillion indicators.

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