Guide to Day Trading Strategies

Chart of Ascending and Descending Trend Lines.

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H O W T O D A Y T R A D E
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Ascending and Descending Support and Resistance Lines
In addition to horizontal support and resistance lines, we can draw both ascending and descending 
support and resistance lines. These lines are not always as obvious as horizontal levels. Since they 
are less obvious, they are also not always well respected by traders. Whenever I’m drawing trend 
lines on a chart, I want to draw them in what seems like the most obvious place. This means we 
need to see lots of candles tapping the trend line and con
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rming its validity. My charts typically 
have a lot of horizontal lines at recent support and resistance areas, with one or two ascending or 
descending trend lines based on the large trend of the last several months. Occasionally, I will draw 
a descending trend line during the formation of a pullback, or to highlight the top or bottom of a 
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ag pattern. These types of trend lines typically span the length of just a few days of price action.
Chart of Triggers (in orange) and Resistance (in red).

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R O S S C A M E R O N
48
Windows & Triggers
When I look at daily charts, I am looking for windows with no support and resistance. I know 
when the price action gets inside that window, we have breakout potential and the price can 
squeeze to the top or bottom of the window. It’s important to note that we only want to trade 
stocks that have breakout potential. If a stock has the potential to move $1.00 we may only be 
able to capture half of the move. So if a stock doesn’t have potential to make a big move it’s not 
worth watching. These windows that we’re looking for have to be extremely obvious in order to 
get the high relative volume needed to get a big move. Based on the strategies I trade, windows 
and triggers are only in play on stocks that have high relative volume due to a catalyst. For this 
reason, I don’t spend a lot of time looking for windows and triggers on the daily charts of random 
stocks. I only analyze the charts of stocks that are in play each day due to news.
What is the difference between a trigger and a resistance level? Technically, a trigger is a potential 
resistance level, but the difference between calling it resistance and calling it a trigger is based 
on how much room it has until the next resistance level. A resistance level that has a large 
window of no resistance above it, is called a trigger. A window on a chart must be larger than 
the Average True Range (ATR) of the stock in order for me to consider it signi
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cant. Every stock 
has an average true range based on the price range of the last 14 days. If a stock has a 50 cent 
ATR, that means it moves on average 50 cents every day. If I was looking at the daily chart of 
that stock and noticed a resistance price that did not have another resistance level above it for 
75 cents, I would consider it a trigger. If the price can break over that trigger, there is potential 
for a move up to the next level. On the other hand, if you notice a price level that has another 
level of resistance in 10 cents, and another level in another 10 cents, those are all little areas 
of resistance. There are not any triggers there because the price levels are packed too closely 
together. The best daily charts will have big windows and big triggers at the top and bottom of 
each window. The space that creates the windows can be long body candles or gaps. Those are 
the only two ways a window can be created on a chart.

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