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Hi, everybody, I’m Marina, the trader chick, and today I want to talk about support areas, specifically areas in general in a market, and when you’re reading charts or regardless of what you are trading, regardless of the financial market that you are trading, they are crucial for you to know and understand support areas and resistance areas. They are like the seat belts of trading. And if you don’t know what to look for and where they are, you might constantly be making the wrong decisions by getting into the wrong markets where there are these strong areas.
So today we are going to talk about what is a support area. So what exactly is a support area, let’s say that we have a downward trending market? Heading down, hang on one second here. Downward trending market, right, but all of a sudden we start to get slow down, right? We start to get pivot’s slowing down. So normally, when I first start to spot these pivots, you know, I definitely am conscious of it.
And I understand I started to see if it is a reversal pattern or what exactly is that? However, I do like to already start to draw in whenever I see one or three or more hits in the same exact location. Right. So all of a sudden I’m noticing this. It’s been going pretty well, going down right as far as a downward trend. However, what is a support area? It is the floor and all of a sudden it’s hitting this area.
One thing that’s super important to remember and understand, markets revisit areas over and over and over again. And if you have a defined area in this particular case, a support area, you want to be very, very cautious and cognizant of those areas. Look at this. The market has revisited, has hit that area again. If it breaks through super, we’re going to be looking for a breakout trade. However, if it doesn’t guess what, we want to be prepared, and we don’t want to continue going into that downward market, it went down a little bit, but it didn’t really go anywhere.
Right? It went right back into that same exact area. Oh, and now it’s jumping up. Maybe this is a transition area. Maybe it’s changed direction. And normally when you have a pretty significant trend support areas, they could turn into channeling margins, which are consolidation areas, exhaustion periods in decision areas. Right. But if you do not have your area drawn in, and you want to be able to draw it in, so it’s all about what can happen in the market, not so much what did, but what can.
And when you have an area, there’s a potential that it can hit that area again. And look at that. It hit that area once again. I personally would not be interested in taking any trades until it really broke through. Right. So it didn’t really go anywhere. And look at that. Now, the support area has definitely moved a little further down. And that’s normal. It’s happening all the time. Right. We just have to be very aware of it.
But until it has a serious a real true confirmation of a break, we do not want to be entering any shorts. We do not want to go short or going long, continuing in a down because we do not have that confirmation. And look what happened. No confirmation. It keeps on hitting, and it can hit over and over and over again. If you do not know how to draw in a support area, that could be a real hindrance.
And you could actually start to lose money because you were believing that the market is continuing down. However, if you have your seatbelt on and if you hit another car or if you hit a wall, you are protected in your support area. That is protection right here. That is your support area. What is a support area? It is the floor of a ceiling. And if you have any questions or if you’re interested in learning more, you can find everything you need on thetraderchick.com and thank you, I’m Marina, The Trader Chick.