Top 5 Deadliest Support & Resistance Trading Mistakes

Truly, support and resistance trading is a strategy that stands the test of time.

It’s important to note that too many traders make simple, but very avoidable mistakes when trading support and resistance trades.

The real “meat” of this content starts at 05:13

These mistakes are some of the most common issues we see from younger traders on our desk and even worse, when not properly identified as a mistake, can hold traders back even as they progress into becoming consistently profitable, and even six, seven and yes, 8 figure traders (even they make these same mistakes at times).

Here is an outline of the mistakes we will cover: :
Not knowing market context - Don’t fight bigger picture
Trader on our desk knowing the levels, but not seeing the obvious Big Picture context and this being a BIG mistake for his trading.
Treating every level the same- Allocate Risk the right way
Story of trader making Same trade, same risk and the feeling of “what the hell?” I only made x on this when losing 90% of x on that lesser opportunity.
Not know the real important levels - Look Left, know the real levels
Story of trading against an Intraday important level, hourly important level just below was WAY more important - hit the intraday break right into the daily level, worked and stopped working quickly and it was a GREAT scalp the other way
Not considering volume - Volume is a big clue
Trading long without volume on a break - others on the desk were licking their lips for a fade because of the quality of the level, he was bulled up looking for a trade that just was not there
Not planning what PlayBook trade to take
Trading a LCID break and covering super early as a microscalp but in review, looking at it as a PlayBook Trade and cruising it next time

We will break down these mistakes and go into some great examples and even highlight best practices to help you better take advantage of this truly important element of trading. When you master support and resistance you can better understand market direction, real entry set ups, and real reasons to sell.

#tradingmistakes #stockmarket #daytrading

[vegasjosh]

Summary

1 Trading S&R without knowing the Market context
I thought this was a good support level, but got stopped out immediately
The whole market was down for the day and trending DOWN
Without looking at the chart, ask yourself, how do you have support and resistance on a downtrend day? You DON’T
On an individual stock, especially an Index Stock, compare the STOCK to the QQQ or SPY
If the whole market is going UP, and your stock just took a dip, there is a conflict

2 Treating every level the exact same
Volume is VERY important
Even if the Price Point is the same at a breakout level, the VOLUME is WAY more important
Know how to SIZE your trade. Small Volume = Small Trade. Large Volume = Larger Trade

3 Not knowing the really important levels
Back up and look at Support and Resistance Levels, 1 day back, 5 days back, 10 days back, 30 days back
Support and Resistance should be looked at on the one day chart. But, compare that to previous day levels
Look for the KEY areas of Support and Resistance

4 Not Considering Volume
When you have a move UP into Resistance, look at the VOLUME
No Volume, No Trade

5 Not taking the trade from your Playbook once you see the right setup

[Vemrah]

This is possibly the most important video on trading i ever watch on youtube... Thanks for your time and effort ..

[probingone]

I am not a member of this organization, BUT this is a really important lesson. Thank you for putting this out there in the universe for the rest of the trading community 🙏

[SidaliTemkit]

SMB are one of the rare, if not the only ones, that gives the WHY and HOW; and not telling you to simply wait blindly for a list of confluences you can't explain. Thanks a lot SMB.

[JessicaKendal]

Wish I saw this before losing 7k on TSLA today. 20 point move with no pullback after so much major fundamentals news, my worst day ever. Gave back all my gains for the past 2 months.

[soprossok]

This is one of the simplest but the best lessons. Thank SMB for sharing.

[ggvartanian]

Really good video, Jeff. During your intro, it felt as if you could’ve been speaking directly to me, addressing some of my biggest mistakes. So this one really resonated with me. Cheers for that.

[tadpoleman]

Good job explaining this concept MikeyB.

[joefeinstein]

Listened to this talk again 10 months later and got a ton of value. I really understand these points now, having gone through SMB's training for the last 9 months. Some great pro tips here. Plus what Jeff says at the end is profoundly true: bad habits form quickly and we are mostly unaware of them. A good dynamic process identifies mistakes the first time and implements immediate change, plus recognizes success and continues on the successful path.

[Kaitrader]

Without doubt the very best trading channel by a long shot

[erikrosalez]

This content is invaluable guys thank you for putting it up for free!

[claytonkimbrew]

I literally made the same mistake on AMD😅

I can’t sincerely thank you enough for laying these out. I know I’ve been making the same errors, but just didn’t fully understand how to categorize and track them. So, this is a tremendous help.

[cchoi]

Super super helpful. Wow I made these mistakes all the time except for the first mistake.

[pedropablopimientaperez]

Thank you so much for sharing, SMB Capital always providing great content with us retail Traders❤

[Jaysnipes]

Watch these long videos on 1.25 speed or 1.5 speed. Much better.

[markofny]

Thanks for posting this! Yeah, going long or short on medium to large caps and NOT paying attention to what the market is doing or ignoring what the market is doing is a big big mistake. It was also so important to point out that there is a BIG difference between a breakout off of important level at the market open vs later in the day AFTER the stock has already made a big move. Past that point, I'd just be scalping these moves at best. More likely, I wouldn't even trust those breakouts and wait for the breakout to fail, retrace new support and only enter into it once I see continuation off of new support. Yes, I may miss out on an even bigger move, but getting into what is likely to be an exhaustion move is too risky and can be very costly.

[audioface]

As someone finally getting a clear vision on trading S/R levels. I’ve def made all these mistakes. Great video 👍

[daytradinguzb]

I had problem with mistake 5. Had idea about trade right but to hold on to trade was a problem. Anyway great video.

[sadako]

thank you for your invaluable sharing SMB! I liked that alot..As a forex trader, if i dont have reliable volume per se to gauge, what are/is the next best thing i can look at other than volume?Thanks!

[JasRoss]

I've got am entire monitor dedicated to macro. SPY, TICK, QQQ, DXY and a handful of yield rates all to glance over to see where market sentiment is at any given moment. I have had great ticker setups, but learned very quickly not to try and trade against the overall market. It is like trying to swim upstream. Your setup might be great, but the macro headwinds take that trade completely out of play. Just something to keep your EV skewed in your favor.