{"id":36770,"date":"2014-03-13T21:23:17","date_gmt":"2014-03-14T01:23:17","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=36770"},"modified":"2023-04-25T16:53:58","modified_gmt":"2023-04-25T20:53:58","slug":"trading-lesson-establishing-a-trading-range-plug","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/trading-lesson-establishing-a-trading-range-plug","title":{"rendered":"Trading Lesson: Establishing A Trading Range\u2014$PLUG"},"content":{"rendered":"<p>Often I receive questions regarding how I determine important price points for establishing trades. It is a combination of several factors each time but by far the heaviest weight is given to recent support and resistance levels. You would be surprised at how often after I make a trade I&#8217;ll receive a comment like &#8220;you shorted at the 66.3% fib retracement&#8221; or &#8220;you got in at the 20 period exponential&#8221; something or other. Nope! Or at least that is not how I found my level. It just so happens that important S\/R levels seem to match up quite often with many of the more commonly or uncommonly used technically derived levels.<\/p>\n<p>Here is a short clip from today&#8217;s AM Meeting where I discuss what I view at the most likely trading range in PLUG for the day from about 7 to 8.30. Beneath the video is a chart I marked up to show you how I spotted the levels as well. In addition to the chart I considered the following factors when designing my trading plan for the day.<\/p>\n<ul>\n<li>PLUG had experienced a huge &#8220;trend day&#8221; on Tuesday so my expectation was that its range would compress for 2-3 days. Yesterday it had about a 2 point range so today I was looking for about 1.50. Once I saw how it reacted to its earnings release it became easier to use prior S\/R levels that corresponded pretty closely with that 1.50 band<\/li>\n<li>If I have a range that I&#8217;m fairly comfortable with I simply look to short the top of the range and go long at the bottom. I try to avoid trades in the middle of that range as price movement tends to be more random<\/li>\n<li>The initial reaction to the earnings was positive with PLUG trading more than 1 point above the prior day&#8217;s range so that helped guide my initial thought process on where today&#8217;s range would fall<\/li>\n<li>PLUG actively traded in the pre-market respecting the levels I had identified solidifying the importance of those levels to me<\/li>\n<\/ul>\n<p><iframe loading=\"lazy\" src=\"\/\/www.youtube.com\/embed\/pecqiUAZdf0\" width=\"610\" height=\"370\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/03\/finding-important-prices.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-36772\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/03\/finding-important-prices.png\" alt=\"finding important prices\" width=\"583\" height=\"314\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/03\/finding-important-prices.png 1215w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/03\/finding-important-prices-300x161.png 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/03\/finding-important-prices-1024x552.png 1024w\" sizes=\"auto, (max-width: 583px) 100vw, 583px\" \/><\/a><\/p>\n<p>I discuss trading setups like this each morning with our desk and then our traders can see me execute them live in <a href=\"https:\/\/www.smbtraining.com\/blog\/trader-90-trader-365\">SMB Real Time<\/a>. You can find our more information on this and our other trading and mentoring tools <a href=\"http:\/\/www.smbtraining.com\/smb-tools\">here<\/a>:<\/p>\n<p><a href=\"http:\/\/twitter.com\/sspencer_smb\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n<p>Steven Spencer is the co-founder of SMB Capital and SMB University which provides trading education in stocks, and options. He has traded professionally for 18 years. His email address is: sspencer@smbcap.com.<\/p>\n<p>Steven Spencer is currently long PLUG, GM, CROX and short WLT<\/p>\n<p><a href=\"https:\/\/tradingworkshop.com\/\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-42831\" src=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2023\/03\/smbwebinarsignup.jpg\" alt=\"tradingworkshop\" width=\"600\" height=\"300\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Often I receive questions regarding how I determine important price points for establishing trades. It is a combination of several factors each time but by far the heaviest weight is given to recent support and resistance levels. You would be surprised at how often after I make a trade I&#8217;ll receive a comment like &#8220;you shorted at the 66.3% fib &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/trading-lesson-establishing-a-trading-range-plug\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":36772,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,1373],"tags":[3864,727,3865,38],"class_list":["post-36770","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-steven_spencer_steves_blogs","category-trading-lesson","tag-establishing","tag-lesson","tag-rangeplug","tag-trading"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Trading Lesson: Establishing A Trading Range\u2014$PLUG | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/trading-lesson-establishing-a-trading-range-plug\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trading Lesson: Establishing A Trading Range\u2014$PLUG | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Often I receive questions regarding how I determine important price points for establishing trades. It is a combination of several factors each time but by far the heaviest weight is given to recent support and resistance levels. You would be surprised at how often after I make a trade I&#8217;ll receive a comment like &#8220;you shorted at the 66.3% fib ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/trading-lesson-establishing-a-trading-range-plug\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2014-03-14T01:23:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-25T20:53:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/03\/finding-important-prices.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1215\" \/>\n\t<meta property=\"og:image:height\" content=\"655\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"sspencer\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" 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