I'm gonna be showing you one of my favorite strategies, the Gap down the buying setup to demonstrate how I use supply and demand to plan my entry levels, my stop loss and profit targets. You will never find the simple yet powerful trading technique than just trading with support and resistance levels. in this video. I'm sharing with you my personal technique to identify support and resistance levels that will actually improve your profitability in trading whether you're trading stocks, crypto, Forex or even futures and to truly help you achieve the results you're looking for.

I'll be sharing with you guys how to execute a trading strategy based on supports and resistance lines that we've drawn. So if you're ready for this humble Trader Master class, then don't forget to smash the like button and share this video with your trading. Buddies When you master these simple lessons such as supply and demand, you can properly Define These three things in your trade planning process: Market Direction Planning and perfecting your entry, planning your price Target and your exit and of course using everything you learn to execute the strategy. I'm gonna teach you in this video.

Here's a quick recap of support and resistance. A support level is a level where more buyers came in to buy the stock than sellers on a chart. It's gonna look like the stock bounce of the same level multiple times before because this ended up buying demand to support that stock when it's being sold off to those price levels. On the other hand, resistance levels are where sellers stepped in to sell the stock.

So whenever you see the stock run to those areas in the past before, you can see that buyers decrease and there's more sellers showing up and they decided to take profit or just get out of their existing position. And that's why it's called a resistance. Keep in mind these supports and resistance levels. under some magical lines of stock candles just bounced off for no reason.

These lines represent significant price levels that people have historically agreed to buy or sell. so we must make sure we chart out those levels because it's very likely that's gonna happen again. So let me show you how to do so right now. To start, go to the daily chart of the stock that you're looking to trade and how I find these stocks to trade is usually on my daily Gap up scanners.

So if you look at the recent daily chart of coinbase, it's capped up multiple times in the past before, so that's the reason it showed up on my radar. I'm always starting from the daily chart because this gives me an overview of where the stock is heading to. It's a stock currently in uptrend or a downtrend. This very simple information is actually very important for short-term Traders Like you and I Now looking at the stock coinbase, this is a daily chart.

Once again, you can tell that it's an extreme uptrend. ever since the stock broke through this 200. SMA This orange line right here you can see higher highs breaking out through new highs through these daily resistance which we're going to talk about in just a second. Through all these resistance here and here and you can see all these lows are getting bought back up higher lows, higher highs and will make it new Actually 52-week highs right now at around 105s and all of those signs point to a very, very bullish and strong uptrending stock.

And if you want to learn how I scan and find these very strong stocks to trade, then comments pre-market down below and I'll share with you my entire morning routine in a video. Okay, now I'm gonna simplify the process of drawing support and resistance lines for you on Coinbase. The reason you should keep this technical analysis process very simple is because you don't want to be spending too much time trying to make sure all your lines are accurate and very perfect and I'll go over why in just a little bit. So let me demonstrate the two very simple steps of drawing support and resistance lines to you.

Right now, feel free to find this coinbase chart on your trading platform and follow along with me. Step number one: Find the most obvious price levels. To do this, just look out for the three most apparent things on your dating chart: the extreme highs, extreme lows, and any obvious V shapes and W shapes formed by the candles. So let's look at the coinbase chart right now.

we talked about the extreme highs and the extreme lows. Now if you look at the last two years charts then what do you see. You can see all these lines are sticking out here here and you can see obviously recently around the 109 110s these are the extreme highs. so you want to make sure you draw a line around that levels over here recent highs you can see the extreme part I point out.

and now let's look at the extreme lows. What do you see here? You can see this V shape over here that's an extreme low and as well over here you can see this V shape and overall they form like a w shape. as you can tell from the daily chart so you want to make note of that as well. W Shades V shape over here.

Once again another one down here. Okay, even though these extreme low levels like the 33 dollars, the fifty dollars, they're kind of far from where the stock is currently trading at at 110 area, we still want to do this exercise of drawing the support levels. Let's see on the daily choice of scroll through over here to the middle 2022 another high. Here you can see the Wicks over here and from the lows from May of 2022.

so those are also you know significant levels you want to make take note of. So now we have the most extreme support and resistance levels and here's the reason you want to make sure you're using the most obvious levels. They can tell you what prices the majority of the traders in the market is watching. You can see from the beginning of 2023.

over here that's where the stock broke out, of how that supports and when to break out to over 80 80. once again over here in the middle of 2023 again in May and this time around in June. That's actually the level the support level where everyone bought the stock with increasing in volume which we're gonna talk about in just a second later in the video. but after the stock got bought back around the support that swinging led to a huge breakout to new highs to 110s and vice versa.

It's also very important to make note of the extreme highs the resistance levels. you can tell over here this area around like 84 85 dollars area. It's been tested many times here here here, here and here right before whenever the stock went to the 85s it sold off and to went lower once again here in February and April but this time around in June It shows you that the stock tested that resistance one more time. However, whenever you see an extreme resistance on the daily chart this one over here got broken out of such as this one in June you want to make note of that because prior resistance once broken out of becomes new support.

That's actually a strategy I'm gonna mention later in the video so hold on tight. but for now you just need to know why. You need to make note of all the extreme resistance and the extreme support. So in a big picture, it's very important to make note of the most obvious price levels, both the support and resistance because you need that information to form a trading plan to help you figure out when to buy the stock, your entry point, your price Target and your Risk Management areas.

Moving on to step number two to join support and resistance, use a horizontal line to connect at least three obvious points. So a very quick tip for you is to always zoom out on the daily chart like so I Want to zoom out on a daily chart to make it very simple to see the where the lines actually connect so you can identify all the highs and the lows that we had earlier and make sure that they connect at these three points and once again, that 85 84 dollars area, you wanted to make sure it's been tested multiple times before whether it's a support or resistance like this one. So multiple touch points another one over here, that 50 51 dollars area and 64s. The more touch points you see on the horizontal lines the better as that means the level has been tested multiple times in the past before and it's considered significant for other Traders Bots or investors alike.

So if I was day trading, the stock or short-term swing trading in the stock based on the most recent performance, then the levels I'll be using will be that 100 support right here. as well as that 108, 110s, resistance 108, and 110 from this recent resistance area right here. and the support around 100 once again, and a bonus tip for you based on my prior experience is that you can try to line up your horizontal lines with the whole numbers whole dollar numbers such as 200 or in this case 110, 100, 108. people don't generally care about you know, 10 cents, 50 cents, 20 cents That much as human Traders investors or Bots, they're psychologically programmed to be more inclined to take note of whole dollar numbers.

And one more note is that all these areas the price levels are rough areas of support and resistance, supply and demand. They are not gonna be perfect and never gonna be exact to the scent. So that's why when you're drawing out these levels and planning them, you want to use rough whole dollar numbers. Okay, so now that we understand the two very simple steps of drawing support and resistance, now here comes the actual practical lessons on how to apply your knowledge to your trading strategies.

Now the first key lesson for you today is to remember to use volume as your guide when your trading breakouts or breakdowns from the daily key levels. You can see all these bars on The Dating charts over here down below. You should Having any platform that you're in, the voting bars over here reflect the number of shares as bought or sold that day, basically the daily transactions. So whenever you see a volume breakout such as this day and this day over here that tells you these levels have a lot of interest whether it's from buyers or Sellers and if the voting bar is green meaning the stock is actually bought up and bought into, so those are significant levels like you want to make note of, especially if you're portraying a lot of the breakout strategies.

And this is the quickest way for you to analyze the strength of a particular support or resistance. So if you see this 85 dollars over here a lot of voting on this particular day, you can see that also lines up with the level over here on a high volume trade a day from February of 2023 then that's how you could You know obviously nothing is perfect and nothing is gonna be 100 correct. but by using volume and analyzing the volume paired with your daily support or resistance that tells you okay once the stock breaks out of the same level from before the same resistance from prior with high volume that a lot of times that tells you there's enough buying volume and enough buying demand to support an even higher breakout. so the stock is most likely going to break out even higher.

So let's use these very recent breakout days on Coinbase this day and this stay here for our demonstration on the strategies that I would use. So you can see on this huge breakout day with a high volume, you can see the stock actually held that support of 85 dollars from the day before and once that breaks out of the former highs around 80 92 dollars. That's when you see it's gonna be a high voltage breakouts because number one, you held the daily resistance that should have been broken down, but it didn't So when the resistance is broken out of it becomes support. you can see it.

On this particular day, the weakness got bought back up and the stock squeezed. It was a pretty amazing squeeze and breakout. A lot of shorts got trapped and once the stock breaks through that recent highs the little resistance of from just two days ago 90.91 then it becomes a trend. Join Strategy: Why is it Trend drawing? Because you don't have any clear resistance after the 92 dollars until that 100 101s area.

Now the second day over here on July 14th you can see the stock actually got down. So that's why you had the opening candle to be around 106 and you actually dipped all the way to 101. that's what we call a Gap Down. This is actually one of my favorite strategies.

um, to trade And I'm gonna show you later in the video in which you're buying near the support area on a goddamn day so you're buying your support to sell at previous highs I Don't really like to trade breakout strategies, but I do love to buy the Gap Downs So Speaking of this Gap down Long strategy, that's actually what we're going to be talking about in the support and resistance. Key lesson number two. So we are moving into the good stuff now: the actual application and execution and key strategies using the technical levels we talked about. We're gonna be talking about trading on the intraday time frames with your daily levels, as well as finding your levels to buy, sell, and timing your exits.

But before you do so, if you're enjoying these videos on technical analysis demos and applying it into actual strategies, then please remember to drop a like And subscribe I Have a lot more video lessons for you coming soon. now that you'll learn how to draw support and resistance in the two simple steps and using volume analysis on the data chart to help with your buyers, you are ready to create a trading plan using a trading strategy. I'm gonna be showing you one of my favorite strategies, the Gap Down Dip Buying setup to demonstrate how I use supply and demand to plan my entry levels, my stop loss and profit targets. So let's finally have our intraday charts open on the side over here.

I'm going to be using the five minute chart on the intraday chart and have the daily chart lined up on the left hand side. So we're talking about this particular day over here the day with a huge gap down right which is this day over here on July 14th. Now this is something we've talked about previously on this channel. You want to buy the stocks that had the strong Breakout day the day before and you want to trade the continuation the second day.

So you can see on this day before the day before on Thursday This day here you had a huge strong daily breakout day the one we talked about earlier in which it broke out of 85 dollars dipped and held that support on The Daily through the recent high 91s and went straight to a hundred dollars. So that's a strong day one that we're talking about Now on day two, you can see that 100 psychological Mark which is strong from that's a daily support level drum from August of last year and then also May of last year. So if you line up that level on the daily chart, you can see 100 psychological level over here and that also lines up with the little support consolidation area from the day before. This is what we call Power Hour Around 2, 30, 3 o'clock you can see the stock Consolidated around this 100 area.

Again, not exactly the Cent because technical analysis is not supposed to be perfect like we talked about earlier. you held us consolidation area and broke out higher. So next day with this huge gap down, that's the level I'm looking at. Okay, 100 is a stock holding that level Now pre-market you can see the stock.

you know again didn't bounce off exactly to 100 but went to a low of 101 60s. You know, within that range that's a rough area we're looking at. So on pre-market that day you wanna see Okay, you meet Criterion Number one, the day one breakout to the day before and criteria number two a gap down to roughly the daily key level you're looking at. None of the two technical criteria is met.

You want to start timing your entries and all your executions. So in the ideal world you want to be using this daily key level 100 as your ideal risk and entry area. But obviously that's gonna not gonna work in this case because by the time we all wake up at around like this time usually around eight o'clock 8 30. the stock is already trading around 105..

So in this case you want to be flexible. So what I would do in this case is to use the pre-market levels. you can see pre-market This thing sold off to 100. bounce back up to 106 and bounced out that 104.60s area.

Over here you can see this is the area the stock held broke out of once, held twice. You can see it bounce off and bounced off again. So that's gonna be the area I'm gonna risk off. So if I'm using this pre-mica low support area as my rough risk, let's say I get in around this 105 Syria my risk is below that pre-market support I wouldn't want to risk it all the way down to 100 dollars.

So I want to keep my wrist tight at around one dollar per share. Now where can my profit Target get me? Obviously the perfect price Target would be the daily resistance of one tens. So in this case that means if I get in around 105 risk 104s a dollar per share. I can get potentially five dollars out of that trade.

so the risk award would be one to five. Now if you want to play conservative and you don't want to use a daily in the most extreme levels, you can use the pre-market area which is also coincidentally yesterday's Pride days close which will be 107. So if that's the case, 107 107.90s So that means you'll be risking a dollar per share, right? Could you potentially get a little bit more than two dollars? So making that trade the conservative trade risk Award of only one to two. So that's how I would plan and trade the Gap Down Long strategy.

Using all of these technicals from the daily chart and as well as if needed the intraday chart, this Gap Down Long strategy is a setup I use when the market sentiment is extremely bullish, which has been the case for Coinbase and a lot of other tech stocks, especially in those involved in Bitcoin sector. If you want to learn more about this Gap Down Long strategy I Actually have made the video previously on this channel talking about this in even more detail, so check it out if you haven't done so already. Okay, so now that you learned how to implement and execute these technical levels, you should also learn about these crucial mistakes you should avoid to truly improve your profitability. Number One: Remember, these price levels are never going to touch exactly to the scent.

They are not perfect treaty, supply and demand areas as general zones of buying and selling. Generally speaking, the higher the price and the more volatile the stock, the bigger of the range it would be. Number two: Don't be in a hurry to jump into a trade every time you see the price touches your support your resistance level. My Pro tip for you is to wait for at least one or two retests of the key level before entering the stock.

Whether it's long or short notice down, always make sure you look for confirmation that your key level is indeed respected by the market number three. Yes, while it's a very important and crucial to know the general areas of buying and selling, it's still important for you to assess your risk management, basically making sure that for every trade you take let's say you buy a support, you can potentially get at least one to two or one to three or more. If you want to learn how to combine this technical key level lesson with many other strategies whether you're buying or selling, then you should check out my technical analysis master class over here. Thank you guys so much for watching us always! I'm the humble Trader and I'll see you guys in the next video.