1. Support and Resistance

• What it is:
  • Support is where the price tends to stop falling.
  • Resistance is where the price tends to stop rising.
• Why it matters:
  • Identifying these levels helps day traders plan entries, exits, and stop-loss points.
• Example:
  • If a stock repeatedly bounces around $100, that’s support. If it struggles around $110, that’s resistance.

2. Trend Lines

• What it is:
  • Diagonal support/resistance lines showing the general direction (uptrend, downtrend).
• Why it matters:
  • Helps traders ride the trend instead of fighting it.
• Tip:
  • Connect at least two highs (for downtrend) or two lows (for uptrend) to draw a trend line.

3. Candlestick Patterns

• Key Patterns to Know:
  • Doji: Market is undecided; can signal reversals.
  • Hammer: Bullish reversal signal after a downtrend.
  • Shooting Star: Bearish reversal signal after an uptrend.
  • Engulfing Patterns: Strong reversal indications.
• Why it matters:
  • Candlesticks offer early warning signs before trends shift.

4. Breakouts and Fakeouts

• Breakout:
  • Price moves strongly above resistance or below support.
• Fakeout:
  • Price briefly breaks a level but then reverses hard.
• Why it matters:
  • Knowing how to spot real vs fake breakouts protects you from bad trades.

5. Volume Analysis

• What it is:
  • Study of the number of shares/contracts traded.
• Why it matters:
  • High volume confirms strong moves; low volume warns of weak moves.
• Tip:
  • Look for volume spikes on breakouts for higher success probability.

6. Price Action Zones (Supply and Demand)

• What it is:
  • Supply = where sellers overwhelm buyers (price drops).
  • Demand = where buyers overwhelm sellers (price rises).
• Why it matters:
  • Zones show where big players (institutions) are active.

7. Higher Highs and Lower Lows

• Uptrend:
  • Higher highs and higher lows.
• Downtrend:
  • Lower highs and lower lows.
• Why it matters:
  • Structure analysis keeps you trading with the dominant force.

8. Risk Management and Stop Loss Placement

• What it is:
  • Setting limits on how much you’re willing to lose.
• Why it matters:
  • Even the best setups fail; small losses keep you in the game.
• Tip:
  • Place stops beyond key levels (like beyond a swing high/low).

9. Chart Patterns

• Must Know Patterns:
  • Flags and Pennants: Continuation patterns after a strong move.
  • Head and Shoulders: Reversal pattern.
  • Double Top/Bottom: Major reversal signals.
• Why it matters:
  • Pattern recognition helps predict where price may go next.

10. Market Context

• What it is:
  • Understanding the bigger picture (market sentiment, news events).
• Why it matters:
  • Avoid fighting strong macro trends or news-driven volatility.

🚀 Quick Action Plan for Day Traders: