Technical Analysis Explained - Trading Congestion Action Part I
We speak here of congestion action trading . Congestion action in a market is one that goes back and forth between congestion confines , between support as well as resistance ( or between the block level and dotted line in the terms of Drummond Geometry ). This is action in the market that happens in congestion , and when there is not a trend run. The Dotted Line is the level created by the highest high of the preceding up trend , or the very lowest low that the preceding down trend created. The low of the very first bar that closes on the other side of the Pldot within an uptrend is the first Block Level , or the high of the first bar that closes on the other side of the PL Dot in a down trend .
Once you have a sufficient understanding of congestion action trading theory, patterns, and characteristics , you can really make money. It's a lot like harvesting a good crop. Congestion action trading can really earn bread and butter ....and what's more , you can purchase a table for the bread , and a house for the table , and the estate to hold the house , and the car, the driver, and the boat, and the plane, and all the other toys or essentials you may or may not desire . Essentially, there is a lot of potential in congestion action trading , if you take congestion action trading and learn all you can.
Congestion action trading - what is it ?
One result of technical analysis explained in this way with Drummond Geometry is that the definitions are clear . Price is either in a trend run or it is not . It is not is a trend run when after three or more closes on one side of the PL Dot it closes on the other side of the PLdot . If there is no trend run, then the market is in a congestion. It's very clear and simple .
That first bar when price closes on the opposite side of the trending dot is the congestion entrance bar . We can say that by definition the market is then in congestion . When congestion is first entered we know that a dotted line as well as a block level get created. This block level is the first block level of the congestion . So , the name for this market action is congestion action which begins with a congestion entrance bar and goes on for a time that is indefinite until on one side of the PLdot there are three closes, showing the beginning of a new trend .
Now let's look at the way the limits of congestion are defined with technical analysis explained, and how these limits can be expanded.
The parameters of congestion are defined by congestion action , which is also known as the confines of congestion . Keep in mind that the confines of congestion are defined by the dotted line and the block level , and that the first block level is established by the congestion entrance bar . But these levels can be expanded . If prices goes outside the dotted line, or outside of the block level , while there is still congestion in the market ( without three straight closes occurring on the one side of the PLdot), then price redefines the congestion confines and there can be established an even larger congestion . This can continue several times until a new trend run appears .
Next time we'll talk more about congestion trading in the technical analysis explained series.
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Let's continue our discussion of congestion action trading in the article series about technical analysis explained.
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Let's continue our discussion of congestion action trading in the article series about technical analysis explained.
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