Prop Training Section 7 - Intraday Fundamentals

Intraday Levels

As traders we are constantly striving to gain an edge. One of the simplest and most effective ways to gain an edge in day trading is to keep track of important intraday price levels. By keeping track of important intraday price levels you are putting yourself in a position to trade stocks when the risk versus reward is very favorable.

Stocks that are In Play will develop several support and resistance levels during the first few hours of trading. They include: the top and bottom of the Opening Range; the intraday high and low; the top and bottom of an intraday consolidation; and other levels where a large amount of volume was traded. Take a look at the two charts below where I have labeled levels of interest.

Levels of Interest
1. Intraday High
2. Opening Range High
3.Opening Range Low

Notice that the stock pulled back in the afternoon to the Opening Range High (2) and bounced back to the Intraday High (1).

Levels of Interest for the picture above
1) Opening Range High
2) Intraday High
3) Bottom of Consolidation

The stock establishes strength by trading above the Opening Range High (1). After it sells off from the Intraday High (2) it pulls back to a support area marked by (3).

You can identify levels of interest by examining a 3-minute intraday chart. Volume done at these levels will give you an idea of how significant they are. We set alerts above levels of interest in strong stocks because we want to buy above support and resistance. We set alerts below levels of interest in weak stocks because we want to get short below support and resistance.

Set the appropriate alerts and be prepared to trade off of them. Your first priority should be given to stocks you traded earlier in the day followed by stocks others on the desk have shared as well as stocks found via the filters.

Remember to share important intraday levels via the “Intraday Alerts” spreadsheet.