As you may have noticed if you have watched enough of these videos throughout the past year if we like to find a trade setup with only one key level to monitor and that’s for good reason. Once you get too many levels crowding your screen, it becomes sensory overload and you don’t know which level to base your trade off of. That’s where creating a plan comes in to play.

Take a good look at the video below and pay special attention to us creating our trading plan based on the one level we have marked on the stock. In the case of International Gaming Tech (IGT), we have one key level marked and from there, we then can go into our trading plan, which can often be a two sided plan as you will see.

For IGT, the main level we are watching is 30 as a support level. However, just because this is a support level does not mean we blindly take calls on a bounce off this level, quite the contrary. This levels indicates where we need to zero in our focus and pay close attention to what price action is telling us.

A common mistake I see traders make is when they create their plan, they become robotic about it, as in price comes to support and they automatically take calls, even if price action tells them that they should rethink that move. Your plan is more like guardrails than it is instructions on what must be done.

Levels give you a point on the chart where you need to zero in your focus so you can see how things like price action or volume are playing out to dictate whether or not you should enter a given trade. This is why you often hear me in my videos say things like, “if prices fails here” or “if price rejects here.”

Just because we find a meaningful level, doesn’t mean the market is going to react the way we think it will. So, in the case of this trade, we know we need to pay attention to…

Watch the full video at WEALTHPOP.com