Jun. 20 at 3:37 PM
Just a short long weekend lesson for you all. The full lesson was posted in the Discord.
Most traders focus on support and resistance.
One thing I always ask myself is:
Who's trapped here?
Imagine a stock runs from
$2 to
$8 and then drops back to
$4.
Many buyers who chased near the highs are now holding losses. If the stock eventually works its way back toward
$8, some may sell just to get out at breakeven.
On the flip side, if a stock breaks down, shorts pile in, and then buyers reclaim the level, those shorts can become future buyers as they rush to cover.
That's one reason failed breakdowns can sometimes lead to strong upside moves.
The next time you're reviewing a chart, don't just look at support and resistance.
Ask yourself:
Who's trapped, and what are they likely to do next? 📈
- JL
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