How to draw Support and Resistance Lines – Indicators, Earnings Gap (Day Trading Beginners $ROKU)

Drawing your major support and resistance
lines with this 3 step process, is the simplest way to find out whether the stock is a long
or a short intraday. How to draw support and resistance lines in
day trading. I know i’ve done a video on a similar topic
before but I’m going to really slow things down today and take you step by step through
how to draw out these levels and applying them when trading intraday. I’ll also be going over some quick and simple
way I use my indicators. So by the end of this short video, you’ll
be able to draw support and resistance levels that actually matters on your stock charts.
and analyze the overall trend of the stock in the simplest way possible. So if you’re a beginner or novice trader
looking to learn technical analysis and drawing price levels, this video is made for you. I’ll also sharing the story about my trading
mentor from years ago, who taught me almost everything I know. So if you’re interested in hearing the story. Then keep on watching. And don’t forget to always destroy that
like button for the Youtube algorithm. Thank you very much! Alright guys let’s dive right into it. When I draw out my levels for any stock, be
it small cap penny stocks or mid cap large cap stocks. I always always start drawing on the daily
chart first. The daily price and volume levels are the
most significant. And why is the daily chart the most important
tool? To answer that question we must understand
what exactly is a candlestick chart. The chart is basically a visual representation
of major transactions, both on the buying side and the selling side. So this chart maps out the price levels and
where that big money decide to buy. And the reason i say big money is because
it’s the funds, the banks, and millions of dollars going in and out of the stock that
can actually move the price of a stock such as $ROKU. This company has 16 billion market cap. So to move the stock 5% up or down you need…hold
on So basically you need about 2600 worth of
lambo money of either buying or selling to move this stock 5%. And That’s what i mean by big money. They are the money that can cause major selling,
which creates resistance levels. And vice versa, where the big money buys up
the stock, create support. So let’s draw some lines. The first thing I i always do is mark out
the price levels that show major volume break out on the daily chart. Daily Volume tells you is the amount of shares
bought and sold on that day. And when we see major volume break out on
the daily, that means those areas are where the big money in the past decided to buy or
sell this companies shares. Ok so now that we’ve drawn out major price
levels that had volume breakout. The second thing I look for is whether or
not there are gaps on the daily chart and mark out those levels as well. Because if you think about it. There had to be major selling or buying from
the big money to create that overnight gap. Usually these visual gaps on the daily are
caused by fundamental catalysts like earnings or FDA approvals or fails. If you look at ROKU, these icons on the bottom
of thinkorswim daily chart are when they had earnings report. And whether the company beat on earnings or
fail earnings, that fundamental news drove the big money to buy and sell, hence creating
these visual daily gaps. And many times these visual gaps match with
the volume break out too. So lets go in and mark out those levels Missed earnings, funds decided to get out,. Beat earnings, big money see more upside so
they pour money back in. the value of the stock is determined by the
company earning potential. So if this publicly traded company said in
their conference call that they expect to be affected by the trade war and sales will
decrease in the next quarter. That means their revenue will decrease they
can’t make money for their shareholders. So that’s why almost always see big money
movement after each earnings. Ok so after marking out the lines on that
daily that had major volume and cause daily gaps, the third step to drawing key support
and resistance, is to smash the like button if you haven’t done that already. I’d really appreciate it. Ok the third step, We want to go in and adjust
each horizontal price level. The rule of thumb is this, you want each price
line to have touched these candles multiple times in the past. Why? Because like I said earlier, these charts
are a map of historical transactions that happen at these price levels. And we want to see multiple buying and selling
had been done in the past around those lines. Thats hows us, thats the level the big money
is using. So usually I want the lines to have touched
at least 3 times. So let’s do some adjustments here. Once you’re done, a very quick and easy
way to double check whether your support and resistance lines make sense, is to flip the
daily chart to the weekly. The chart should still look very clean. And I want to double check that the lines
still land on major volume breakouts. And still have touched the candles multiple
times in the past. So you can add or move them here if you want
to. When I’m swing trading for more than 2 days,
I use the levels especially on the weekly chart. Ok so now that we have support and resistance
lines charted out. Lets go over some indicators i use in the
charts. And if you want to see how to use daily support
and resistance lines to trade intraday, check out these two videos. I use the 13 EMA, 50 EMA and the 200 SMA. And I also use the above average volume indicator
down here. This volume indicator shows me the major breakouts. And as for the 200 SMA, it’s a really common
one that many traders and funds use as a general guide for them to move money. Basically if a stock is above 200 sma, big
money start pouring more capital to invest, and if the stock is doing really bad and crossing
200 SMA to the downside like ROKU here, also they missed earning around this time, then
the big start pulling their money out of the stock. Hence ROKU was selling off. I don’t trade intraday with 200SMA, like
i said this is just a general guide on the daily chart. As for the 13 and 50 ema, its still just a
general guide that i know many people use out there, its nothing new. Basically on the daily if 13 crossing above
50, that means the stock is uptrending. And if the 13 is crossing below 50, that means
the stock is starting to downtrend. Many people use the same concept and the same
ema to trade intraday as well its a very basic strategy. I personally don’t use it. Because guess what, most indicators are lagging. They only cross after major volume have already
bought or sold the stock. And these Indicators only “work” if the
masses know them, and use them. Thats why i think its so funny whenever people
tell me they have this secret indicator, and they’re not going to tell anyone. Or they are going to package the secret indicators
in a $5000 dvd. If only you and your neighbor know the indicator
and use it, its not likely to work. Like I’ve said many times in the past videos,
don’t rely on indicators or chart patterns. If you rely on them you’ll always be one
or two steps behind. I’ve read many times in the comments that
the way i describe charts and price levels are similar to how Forex traders do it. And that is completely true. In 2016 I was mentored by a forex trader his
name is Orane. He started first in forex trading then moved
on to trading penny stocks using the same methodology. He was sharing many free video lessons and
ideas on a well known penny stock community site run by a well known penny stock guru. All his insight on the stocks and psychology
is what caught my eye and I started following him. But of course, eventually he got banned from
this guru’s site, because he was sharing free ideas and videos that were much much
more useful than the guru’s $5000 alerts and dvd’s. So after he got banned he moved on to work
as a hedge fund manager. And the fund started an educational program. and that’s where I followed him to from 2016
to 2017. The program was expensive, that’s where my
lambo money went. But it was worth every penny. The training program no longer exist now because
he has moved on from trading forex and stocks and on to the next new venture for himself. But we are still in contact, and hopefully
i’ll get to interview him on this channel one day. But the way he taught me about psychology
and how to use it to analyze daily support and resistance lines was truly transformational
in my own trading. This method of charting and set up makes things
simple and very clean to read. I don’t use anymore indicators besides those
I mentioned in this video. That way I can focus on price action, trader
psychology, and how the candles are reacting to each support and resistance levels, instead
of spending the time to check whether all the bollinger bands, RSI, MACD and the stars
in the universe line up. If you find this video helpful, please drop
me a like and subscribe. I create quality day trading videos here every
single week. Like I said before, my mentor came from a
forex background. I don’t trade forex, but I did find some
basic forex videos that explain support and resistance further. I’ll leave them in the description below.

100 thoughts on “How to draw Support and Resistance Lines – Indicators, Earnings Gap (Day Trading Beginners $ROKU)

  1. Wow! Haven't heard that name in a long time. I remember being part of that guru's chatroom that you talked about. At first, he said Orane was one of his students and showed his gains on social media. But once Orane started putting up free informative videos on the guru's website and became popular, I guess that wasn't good for him. I'm glad i recorded some of those videos before they were deleted and he was banned. Later he mentored thru skype and Discord.

  2. Thank you. Quick question for you: most of the lines coming from the daily are far from the intra day trading zone, so how does it help you to trade intra day?

  3. I don’t know how many videos about Support and Resistance I have watched. Let me tell you… I always thoroughly enjoy your lively and informative videos. I hope that you will be able to do an interview with your guru. In fact, many traders enjoy listening to interviews with successful traders/gurus. I am sure that any interviews that you do would be wildly popular!

  4. Excellent learning video! I started trading daily since September last year. I’m now focusing a lot on Support & Resistance. Your video here reinforces and confirms this way of charting. Thank you very much!

  5. I have always started with the Daily chart to learn or remind myself of the stocks history. HOWEVER, I used to draw the highs and lows to form channels and see break outs which works pretty well, that is until last week due to a video by the super famous Lamborghini driver, Miss Humbled Trader. I don’t remember which video it was but she pointed out using volume when drawing support and resistance lines. BINGO! Even if the candle is not the highest one in that specific trend, if it has lots of volume, it usually has more historical points of resistance and support.
    Last Monday I was ready to go long on a stock at opening bell, but the stock started by dropping big time, then it reverse to green creating a new high…this is where I would have normally jumped in… but wait… what if it’s a fake out… I decided to wait on another green candle, it turned red again so I decided to wait on Miss Humbled’s magic volume based support line… which was about $0.20 down. That is where it turned green which is where I jumped into the trade and and just watched the big Lambo money come pouring in!! Thanks Humbled Trader! That is a great tip.

  6. Thank you for your time. I was wondering where you received your education. With all the snake oil salesman out there it's hard to know who to trust. Thanks again 😁

  7. I trade both forex and stocks and I come to learn that I'm able to take ideas and lessons from and they work better than expected for the other.

  8. I need Lambo money to survive, just hanging in tight to learn more everyday, even if people do good there is always a better way, I found this setup lol it works with more than 90% accuracy after tracking my trades, the reason it works is maybe most people know, I wanted to spread this thing more, so it can work more.

  9. very nice would you do a video on how to pick penny stock low float stocks like this one you took your time and it made a big difference in following you during the video also one on how to build a watch list in the same format as this one Thanks really like all the videos its helping my trading a lot

  10. Great video as usual. Question on drawing line on volume breakout or breakdown. For volume breakout, I understand we draw a line on high of that day. My question for volume breakdown, where do we draw the line? On the high of day or low of day?

  11. This is my first comment on a video since long years.
    You are absolutely great! Explanations with such nice manner, and filled with a lot of solid information. I wish you the best!!

  12. Great video – all your content is amazing! Quick question, when setting the s/r levels how far do you go back on the daily chart, 1 year or 2 years?

    Also are you saying that each s/r levels needs to touch three prices points to qualify as a s/r?

    Please make more videos using finviz!!

    Love from England

  13. Tripled Smashed!!! Every video you make is an awaking for many of us especially newbies. I am really interested in seeing a video on what you learned from FOREX Trading that could be used for Day Trading.

  14. Sykes comes off as such a douche… I'd bet all my Lamborghini money that he was the banner of the real trader. Cause he sure is not one…

    Awesome video as always!

  15. This is way better than the $$$$$ expensive course ive bought before. Simpler and it really works, all i need is just to practice more to be consistent.
    ( im still in paper trading until ill be consistent , hopefully ill be able trade again real money next year
    and be able to buy that Lamborghini someday 🙂
    Thank you humbled trader..

  16. I use the weekly and daily. I assign a color for each. That way I know the strength and nature of my long term support and resistance lines.

  17. Intraday I use the 9 and 50 ema and the VWAP.

    Keep up the good work. Love your video's. Also, can you recommend a chatroom who mainly focusses on small to midcaps? I mainly trade /focus on small caps though but maybe in the future, I can start looking to trade some midcaps as well. Or perhaps you're planning to start your own chatroom? I think you would make a great moderator, is my "humbled" opinion 😉

    Lastly, are you happen to be Vietnamese? My Vietnamese roots antenna tells me that you look Vietnamese. Just curious 🙂

  18. Hello HT, I have a question about drawing support and resistance lines by using the volume bars. Do you draw only from the green volume bars or from the red as well? If both, do you change color of your trend lines? Thank you in advance for your reply and time..

  19. Hi,
    I've got a question beside from today's topic haha.
    I just got into trading and have watched your previous video. I moved from CIBC to Questrade regarding better shorting feature. However, today I wanted to short this penny stock LXRX, but I can't short sell at 3:55pm because the fact that there was no stock available. I'm wondering what is your best platform for short selling in Canada in terms of NASDAQ Penny stocks. And how often do you find that you can't short in thinkorswim/questrade/interactive broker ?
    Thank you!

  20. I m forex trader intermediat,draw support resistance it is not that easy otherwise evry body will be successful trader ,i can draw many support and résistance in my chart the problem what support or resist he will react

  21. I just starting watching your videos and find them entertaining and informative. It also doesn't hurt that you are as cute as a button! Keep up the great work!

  22. Hello there , Thank you for your videos, I like them so much,now I understand way much better about the market, I like to know if you have a chatroom too?

  23. Could you explain how volume/market cap "moves" the price by that percentage? Doesn't the price move just based on the demand that's out there?

  24. I agree. Noting where big money entities enter or exit (reflected in daily timeframe volume) has always been a true and substantive indicator. Learning how to play that is a good trading method. And I agree that those entities do play off of 200-day moving averages.

  25. Thank you Humbled Traders for you Good experience n time making all videos. If many followed wat you share n that will moved e market by certain % which is a good thing for us . So the algorithm soon will find another way to stop or destroy our plan or strategy ya !? Haha I think too far 🤓

  26. When you draw the lines on the days with high volume, do you draw the line at the closing price or at the end of the candle wick? Thanks!

  27. Wait, last time i checked i believe you had roughly 3k subs and since then you've quadrupled that. So happy for you, you deserve every single one of them and more

  28. Thank you for sharing this important information that you learned. Looking forward to meeting your mentor, I’m sure he’s very proud of your accomplishments and your educational channel 🙏🏻💰

  29. Thank you again for your great video ! Just one question, why do you use EMA13 and EMA50 instead of others EMA ? Also is 3min chart the best time frame to use the EMA lines ?

  30. I like your videos, and your presentation style. I have a few off topic questions, I haven't seen any Q&A videos of yours. Outside of trading, do you also earn an income from employment? How long have you been trading (including the start of when you started paper trading)? Are there any courses that you may recommend to new traders?

  31. Hey, I'm using questrade for now and I trade penny stocks frequently. How do you avoid their ecn fees reliably or what broker works best for penny stocks in Canada? I'm trying to find the best broker for me. Thanks! 😊

  32. Thank you so much for all your videos I watched them all in one sitting. I will watch them all again everyday until I know this by heart like you do. I've been learning to trade for 4-5 months with bad results. more losses then wins and blew my account 7 times but since i've watch all your videos in the last month I haven't lost a trade yet! You really helped me get my trading plan together. I can't thank you enough the knowledge you share as changed my life! what part of canada are you from im from canada too!

  33. It's exactly how I trade I use no indicators everytime you add an indicator it will influence your thinking all you need is support, resistance, volume and price action.

  34. I have a 20 pounds hammer to make sure that I smash the like button 🤑🤑🤑🤑🤑🤑🤑💵💵💵💵 you’re awesome teacher.

  35. Nice video! (already destroyed the like button)
    I took 2 long trades on BNGO today and both hit my profit targets (2.22 and 2.34) in the first 30 mins after market open. However, the stock goes to above 3.x after few hours. So if I have a fixed risk/reward ratio or profit target, how can I ride on the continuing trend? Should I hold some of the stocks or enter the market again?

  36. You would be the perfect woman if you are making Lambo money by trading…… Are you pushing classes or making a great living trading? You are asking for support on YT….

  37. Great tip on spotting high volumes to support/resistance .. i am a volume trader and if it gaps up/down 3% or more, I am very interested, along with a clean intraday chart pm. Top lists and scanners come in handy 😉

  38. i like your video. can i ask do you know which trading platform has VWAP to trade TSX stock ? TD advanced dashboard dont have , i am doing day trading now .thanks

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