Options Trading Coach Jo Explains Support

Most clients of Options Trading Coach Jo struggle with support. Support is an area rather than an exact magical number.

A strong support area is an area that the stock has frequently gone down to and either pops back up or hangs out at that area until it eventually pops back up. The more times that the support area is hit, then goes back up, the stronger the support area.

Traders that look at a chart can easily see the support area. In fact, they may make the decision or tell their broker to buy the stock once it hits the support area and starts back up. Many traders seeing this same pattern will make the same decisions to buy at support. Due to this high volume of buying, the stock price will raise and continue to raise as more traders see the stock bounce up from support.

Support can be a horizontal area, an ascending area or a descending area. Pay attention to these support areas. Start by drawing lines on your chart where you see a support area.

Determine support areas for 3 stocks by drawing lines on their charts. Watch to see if the stock respects the support area and bounces off and back up.

Of course, the support area can be broken. In this case, watch for the next lower support area and watch to see if your stock respects the new support area.

Determining support can be seen as an art rather than a science. Train your eyes to see support areas and your trading profits will greatly be improved.

Here’s to you,

Coach Jo

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