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Hey, traders, it’s Marina, the trader chick, and I am here with another episode of Making of a Day Trader. Do you guys remember a long, probably, I don’t know? Ten years ago, there used to be a really cool comedian called Rodney Dangerfield, and he used to constantly say, “I don’t get any respect”. You guys remember that. I remember that. And guess what? One of the things that we do to the market is we don’t give it any respect.
You know what? We don’t respect the areas. Do you guys know what the areas are for the market? Well, I’m here to teach you just that. So stick around, and I’m going to show you all the respect we could give to these areas. All right, so what are areas and why do we. All right, so what are areas, and why do we need to respect them? Are you ready to learn? So what are areas? do you guys see this, do you see these pivots, you see how they are hitting that same area over and over and over again?
How about these? See that it’s hitting that same area over and over again? What about all this? Look at all these areas. Look at all these areas. And do you guys see these big black lines? Those are daybreaks. So do you know what happens? Look at this beautiful area. The market respect’s areas and we have to respect them as well. So what are areas what are these areas and why are they so important? This areas are the support and the resistance areas, that’s what they are.
Do you guys know what to support and resistance areas are? If you don’t sign up for my free mini course, simplifyingdaytrading.com, and I’m going to show you how important they are, how to spot them, and understand them. So let’s get ready to learn a little more about support and resistance areas.
Very simple, very simple. It’s the floor, it’s the floor of a trend. So here we’ve got this beautiful downtrend hit in this area over and over again.
It’s hitting a floor. That’s the support area. It’s not doing anything past it right now. Is it going to breakthrough or is it going to completely transition? Not for us to know. What we need to do is we need to respect the area and understand that this is an area the market truly respects support area. Here is again what it looks like. It’s the floor of a market. All right. We have to respect it. We have to love areas because the market loves areas.
It’s the ceiling for the market. You’re headed up, boom. It keeps on hitting it over and over again. It’s hitting that glass ceiling until it breaks through it or transitions down again. Not something for us to really care about as much as we need to care about where those areas are and respect them. All right. What else does support and resistance areas do? Well, they form channels, sideways market. If you guys don’t know much about the sideways market, check out my video on trending markets to understand the importance of a sideways market because that market could eat up all your money and the last thing you want to do is being inside a channeling market where your money is being eaten.
I mean, look at this behavior. Look at this grinding. Is this choppiness. There is no direction here. How can you possibly make any money if you’re stuck between these two areas? So you need to respect it and you need to stay away from it. So there are tradeable areas, there are tradable channels, how do we distinguish tradable channels? I’m personally and in many traders, so I like to trade what you’re seeing right here. And if you look at these little boxes here, these little grids there, each one point.
Right. So if I have approximately ten point with, that means I have enough to do some really cool little mini trends in between where I can figure out ways to enter the market and make some money. And that’s why I called tradable channels. So it has to be pretty wide. However, this is another tradable channel. Do you see? It’s pretty wide, but the market respects areas. It revisits and revisit and revisit, and we need to be prepared, OK?
However, when we have this kind of sideways market where all my money is taken, look at how narrow this channel market is. I don’t go anywhere near it. I know this market is going to eat my money, so I also understand areas and respect them and know that I don’t want to be anywhere near there. This is another great example of a sideways movement where it’s a non-tradable channel. However, I could spot where the areas are.
I know where the support is. I know where the resistance is. And when it breaks through, boom, that’s when I’m going to begin the end. So if you want to check out some breakout trades or breakout areas patterns, check out my other videos. Now, if you don’t know how to draw and support resistance and support areas, sign up for my free mini course, simplifyingdaytrading.com, and I will help you there. Or you can write me at the trader check dot com, but you cannot.
And I repeat this again and again. You cannot go trading live if you do not have the basics down and if you don’t know what a resistance and a support area looks like. And even worse, if you’re trading sideways movements when they’re this narrow and this ugly. No, this is when we respect the areas. We respect the market, and we take a massive chill pill and sit back and relax. Remember, they don’t get any respect. Your money gets no respect.
So you got to respect the markets. What is an interim area?, so you got this gorgeous downward trend happening and all of a sudden you’ve got this many little sideways area. I call it interim areas because it’s kind of like a little pause, you know, like when you’re driving on in like a suburban neighborhood, and you see a stop sign, you kind of just take a quick little stop because you don’t really want to go anywhere. You want to continue.
You want to continue going. But you do have to take that little stop. Right. That little slowdown area are when you’re actually at a traffic light and sitting around waiting until you continue in the same direction. That’s what this consolidation is. But in reality, it’s another sideways movement because in the light market, we don’t know if it’s going to continue until all we know is that the market has come to a pause. And we need to respect that pause.
Recommended Read: Consolidation Area
And we know that pause because of the areas that it’s showing us. It is screaming to us, oh, look at this. I love this area. And you should, too, until I tell you to move out. That’s the market talking to us. So we need to respect the areas so you guys know where the areas are. Do you know where the support and resistance looks like? If not, sign up simplifyingdaytrading.com or write me at thetraderchick.com.
But if you don’t know what to support and resistance area is, say bye bye to your money because you will not be respected.