cashmoney69, I looked at your chart in your opening post to this thread. If you would just add channels to this, things would be so much clearer to you... Michael B.
"define a "small stock" in terms of volume?" if it does over 1mill shares, it is not a small stock, although if it trades at $2 a share, obviously a million shares is not a lot some of my favorite past trading stocks were: FFIV HANS (before it became as well known. i also bot it at $10 split adjusted and held it as an investment. my best investment ever, but i traded it in my trading account, while holding it in my investment account) VPHM etc. when you are trading, you are not trading stocks, you are trading other traders. that is distinctly different from INVEStING, where you are investing in the underlying company via the stock. you want a decent average range, enough liquidity, and there you go
let me amend the last to say the 1mill is not a bright line. 1 mill shares at $80 a share is a pretty big stock. 1 million at $20 is not so much so. moreso , though -the biggest stocks - the big names - have the best market makers and best traders. why not go for the easier plays? as a beginner, if that is what u are
You are drawing support resistance lines where the market hasn't visited enough. so why have you drawn just horizontal lines? take the chart you posted and draw a diagonal line between the high on the second bar in from the left (68.60) and the chart high (third bar in from right). See how many bars tops/bottoms this catches? Immediately you can see a potential trade to buy an upside break of this, if executed place a stop to be executed if the market gets back thru this line (it's not an exact science so give yourself a bit of room either side). Personally I like drawing trend lines (s/r lines if you prefer) to capture a series bar highs/lows (like above) in addition to the more common high's/low's - it gives me a better sense of direction, but each to their own Good luck.