Each morning, I develop trade plans based on technical levels, and today was no different. The focus was on the 5 EMA, 9 EMA, 20 SMA, and 50 SMA, which are crucial in determining entry and exit points.
One of the main lessons from today's trading was the importance of respecting technical levels. When a stock slices through a support level, it often retests that level, turning it into resistance. This concept of former support becoming resistance is fundamental in technical analysis. By understanding and applying this principle, I was able to execute trades with high odds of success, achieving substantial returns in a short period.
Moving averages are a reliable tool for executing trades, but they require a comprehensive strategy that includes risk management and proper sizing. It's not just about entering a trade; it's about having a complete strategy that encompasses entry, exit, and profit management. If you're serious about day trading, I encourage you to develop a robust strategy and continuously learn from each trading day.