Buy At The Support Level And Sell At The Resistance Level
Trading in the futures market is not something that can be done using your gut feelings. To be able to trade in the futures market, be it stocks, commodities or currencies you need to know where to buy and where to sell the contract. This is equally true whether the market is trading in a range or trading in a clear dominant trend.
The market could be moving in a sideways trend because there may be no clear fundamental force that is letting it take a direction. Even when there is no dominant trend in place it could let the trader trade in the market.
One can also trade in the range and make profits.
Trading support and resistance
Be it any asset class one needs to know how to spot the support and resistance on the price chart to be able to take trades.
Support is nothing but the area where the demand was strong. You thus need to look at the areas where there was a big shoot towards the upside in the asset prices. This is the support level and this is where you need to buy the asset.
To be able to spot the support levels you need to look to the left from where the price is and down. The first area where you spot a huge movement in price towards the upside is the support level. This is where you should look to take your long trade should the market retrace back to that level.
It is important to understand that you may be able to spot many support levels on the chart. This does not mean that you will profit when you take trades on the support level. You need to look at the level that have seen a huge price movement to the upside or has made up moves with gaps. These are the high probability support levels.
Resistance is the area where you see a big downwards movement in the asset prices. To spot the nearest resistance level you need to look up and to the left and spot the level from where you see a major price drop.
Similar to the support levels you will also be able to spot many resistance levels. Not all of them will work out because they may not be the strong resistance levels. You need to look for the ones that have seen a major drop or have gapped down.
The resistance is also the area where you can look to short sell in the market. You can read the full report here.