Staying Out of Trouble
One way traders are chopped up is to lose their patience and start chasing the market. A good guideline is to pay special attention to a market when it is trading near the previous day’s high or low. These previously established support and resistance levels are key price action points. Markets may edge through, only to reverse, and that means an opportunity. Trading ranges are often built around the previous day’s high and low.
Check out the TradeFlow chart for the last two days (December 6) as a good example. The support and resistance zones are marked. Trading in the middle between the zones can be difficult. Know your spots and wait for the market to come to you.