Chart Preparation
Technical Preparation of the stock charts
Before we can start day trading on a specific chart, we need to mark the most important thresholds such as support and resistance levels.
We need to look as well to the one minute candles on an intra-day time frame as to the daily candles on a 6 months time frame to identify all most important thresholds and chart patterns.
Daily Chart
First of all we take a look at the half year time window. We identify the support and resistance lines on the chart of the last six months with daily candles. It is important to be aware of these support and resistance levels when the price is approaching one of these levels while we are day-trading. Therefor we mark these critical points with horizontal lines.
We know that when we are approaching a resistance, we should be ready to step out when a break is not taking place. Or, if the break is occurring and volume kicks in, we should built up our share size.
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Intra-day Chart
Secondly we look at the intra-day chart and use the one-minute candles. We set horizontal support and resistance lines in the same way we did for the daily candles on the six months chart.
However, sometimes we can identify an ascending support line when we are approaching the market open. If this is the case, we should draw an ascending support line and be very attentive. If the price of this stock remains above this ascending support line and a resistance is broken, a big move is likely to occur. Keep in mind that we, as always, need a lot of volume to confirm this breakout.
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