Guide to Day Trading Strategies

Support and Resistance at Whole Dollars and Half Dollars
In addition to the support and resistance levels we will 
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nd from ascending or descending trend 
lines, windows, or gaps, we will also see support and resistance as stocks approach whole dollars 
and half dollars. A stock approaching levels such as $10.00, $10.50, $11.00, etc, will typically see 
resistance at those whole and half dollar marks. Conversely, a stock selling off may 
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nd support 
as it drops down to whole dollars and half dollars. Whenever possible, I try to take entries near 
whole dollar and half dollar marks, because I can usually set my stop on the other side of that 
price level. When traditional chart patterns line up with whole dollars and half dollars, it adds 
considerable strength to the setup. Stocks priced below $10.00, will often have more dif
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culty 
breaking through those critical levels than higher priced stocks. A break of a whole dollar such 
as $3.00, could be an opportunity to take a long position with a stop at $2.90 or $2.95. Stocks of 
all price ranges respond well to the price support and resistance of whole dollars and half dollars.
Typically, if I am in a long position and a stock is approaching a whole dollar, I begin taking pro
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t 
in the .90’s, before it hits resistance, and keep the remaining position with a stop at breakeven. 
I would expect to see prices tap the whole dollar to test the resistance level and then pullback. 
Sometimes, that tap becomes the high of day and the trend reverses. If I enter a position at 
$9.99, in anticipation of the whole dollar break, I use a tight 10 cent stop, because I am entering 
a stock near the highs. If prices break over the whole dollar, it is very important that it stays 
above the whole dollar. If prices break over the resistance level and then break back below, I will 
sometimes use this as an opportunity to take a short position with a 10 cent stop. Trading over 
and under the whole dollars and half dollars can provide the opportunity for great entries on 
both momentum and reversal trades. Trading around whole dollars carries a bit more risk than 
traditional chart patterns because the entries are often in anticipation of breakouts or reversals. 
For this reason, I always keep tight stops on these trades. It is important to note that trading over 

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