Tackle Today: Favorable Odds
January 27, 2022
≈ Is what you get when you enter trades at support and resistance. ≈
Traders,
There are two fundamental reasons why we like to enter trades at support and resistance: favorable odds and favorable asymmetry. Today we’re looking at the first. Tomorrow, we’ll address the second.
You can buy any stock and have a 50% chance of success. Flip a coin. Heads, you’re right. Tails, you’re wrong. I suppose the odds could be worse, but I don’t know that I’d be satisfied with a coin flip as my baseline odds. Instead, I want a higher probability of winning than losing. I want to look for times where the chart suggests the stock is more likely to move in one direction versus another.
This is where support and resistance enter the equation.
There are two times when the odds favor buyers:
- When price is sitting at support and
- When it’s breaking above resistance.
Now you understand why the two core bullish patterns we teach in our S.T.E.P. System involve buying an uptrend at support or when it breaks resistance.
There are two times when the odds favor sellers:
- When price is sitting at resistance and
- When it’s breaking below support.
Can you guess how this applies to the two bearish patterns in our S.T.E.P. System?
🛑 Upcoming Webinar – Technical Analysis 101: The Basics of Support and Resistance with Coach Matt Justice | January 31st, 2022 at 8:30 PM EST on YouTube
Join us to learn more about two simple, but powerful, concepts in Technical Analysis known as Support and Resistance. Support and resistance not only represent various price levels; they also represent supply and demand on a technical price chart. Traders use these levels for a variety of important reasons, and you should spend some time learning more about them to improve your understanding of these powerful concepts.
In this webinar you are going to learn:
✅ What is Support
✅ What is Resistance
✅ Demand as Support
✅ Supply as Resistance
✅ How Traders use Support and Resistance
✅ Pivot Point Analysis in Support and Resistance
✅ Examples of Support and Resistance
Click on the button below to go to YouTube and set a reminder so you won’t miss it when Coach Matt goes LIVE.
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Halftime Report 12:30 PM EST
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