This is a trading-tutorial transcript (YouTube) explaining how to manage trades around price gaps and resistance levels. The speaker describes using the prior day's bearish candle, marking gap and resistance levels, watching for gap-fill to the prior low as an 'auction area', and planning multiple short-setup scenarios while ignoring non-qualifying moves.
That's actually a big part of being a profitable trader, actually, the trade management. Let's say, for example, we've got this big bearish candle. Let's say, for example, this is yesterday's and then today we know that the market is gapping from there to there. Now, from this point, the first resistance lines that are going to be in my chart are going to be this one. And then I'm also going to have the gap level in there as well. If we gap fill and we get to there, that's an auction area, because we want to see what happens at yesterday's low. And then if we break through there, we've then got that level there that we can potentially look. So this whole area has a chance to either be rejected because the market at the first trade could start doing this, come back and test there and then go that way. And this would then be my ideal scenario. But then sometimes, obviously this can happen or this can happen. So I'm short already in my mind because the daily chart's telling me that I'm sure. And then I've got three or four different scenarios in which an A plus short setup is going to come in for me. If this doesn't happen, I'm just not bothered with it.
