As a trader, it’s not just important to cut losses quickly and minimize risks, but also make the most reward on your trades by realizing a stock’s full potential. One way to achieve this is by understanding and utilizing resistance levels and a stocks average range.

Resistance levels indicate areas on a stock chart where the price has failed to break through due to selling pressure forming a barrier to upward movement. Traders can use this to their advantage by identifying support and resistance levels on the stock chart, which can help them create a strategy for buying stocks at key support levels and selling them at resistance levels for a profit.

The average range of a stock, which refers to its daily price movement over a given period, is what traders can use to set realistic profit targets and stop losses based on the stock’s volatility. By analyzing the average range, traders can determine the potential price movement of a stock and set profit targets accordingly. For example, if a stock’s average range is $2 over the past few days, traders can set a profit target of $2 after a breakout move.

Combining these strategies can increase the chances of achieving profitable trades. For example, yesterday (3/6/23), ARDX was given as a potential play to our Free Trading Plan Monday members. It suggested a maximum potential target of $4.18.

Even though the high of day was 2 pennies short of the max target reaching $4.16, other members and I were able to start locking in maximum profits knowing the stock was most likely near its full potential.

In summary, understanding resistance levels and the average range can help traders create more effective trading strategies to maximize profits. By developing a trading plan that takes these factors into account, traders can improve their chances of achieving profitable trades and unlocking a stock’s full potential.