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Levelsandzones

The Level is Good Until it's Not (A Lesson in Supply and Demand)G'day, Traders! Despite wars and rumors of wars there are always opportunities to be had in the financial markets, particularly the Energies markets.  The purpose of today's trade example is to demonstrate that once a level of Supply and Demand are created in the financial markets, the rule of thumb is that a level is "good" until they are not... that is, until all the unfilled orders inside them are processed. No matter how old a level may be, they do not go "stale".  Let's look at a trade which closed in the opening minutes of the market at 6PM EST on Sunday March 27, 2022: A long opportunity became available to us on the 4-hour chart on Crude Oil Futures in the wee morning hours of Wednesday, March 5 (2:36am to be exact!). That morning (after having the required coffee and bacon as part of one's trading routine) there was plenty of time to evaluate the trade setup using Supply and Demand analysis. When a trade like this appears and meets your rules-based qualification system, you can then give yourself permission to take the trade. The destination (a.k.a, Target) needs to be an opposing level of qualified Supply. The interesting part, and hence the jist of this article, is that no matter how old a level is, "a level is good until it is not." The level of Supply identified was from July of 2008 – almost 14 years ago! It is treasure chest full of sell orders that was created in 2008 and hasn't been touched since! As you can see from the chart, price entered that Target level and ricocheted right away like a cat on a hot stove! If you drill down to the 1-minute chart you can see that price stayed at that level for a full two minutes until all the Buy Orders were exhausted and the sellers were back in control, driving price back down. When trading via Supply and Demand, don't worry about how old a level is... if it meets your criteria of being a quality level, take it! As always, Trade Well!
NYMEX:CL1!Education
by ocaptain
Part 1. An Algorithm Based Support & Resistance ToolWelcome! Today I'll be demonstrating the efficacy of a method I've determined to identify and trade support and resistance (S/R) zones in real-time. Normally, traditional technical analysis requires a S/R zone to experience multiple validation events (touches, reverses, bounces), before it becomes tradeable. The downside to this method is that numerous profitable trades are bypassed while confirmation is being developed. Unfortunately, many of the most profitable S/R trades appear soon after a level develops (think double/triple tops). After much research and experimentation, I've come up with a tool/indicator that can identify significant S/R zones in real-time. Once a bar closes, there is ZERO repainting. As the chart above shows, this means that you can trade a level as soon as price returns to it - no matter how quickly that occurs. The tool takes into account (not in order of weight): Price action Volume Chart patterns Volatility Momentum By combining multiple methods of analysis, levels are formed quickly, yet accurately. It's pretty important at this point to mention that I'm not claiming this is a get rich quick plan. All the tool does is identify potentially profitable zones that price will often react to. However, it's not infallible (nothing is), and it doesn't teach you to trade. You, as the trader, need to know how to trade price action to ensure a confirmation signal is given before trading a S/R event. You also need to know how to set a stop less, determine appropriate levels of risk, and undertake trade management to ensure profitability. Now, some people say S/R zones are easy to identify - in that case, what's the point of this tool? Simply, this tool takes the guesswork/bias out of S/R zones. As human beings, we're uniquely unsuited to investing money. We're irrational, emotional, ill-disciplined, and impulsive. Frankly, the average person (of which I'm one), needs every useful tool they can get their hands on. This tool means that one step (determining a trade area), is covered for you. That's it. Given the proprietary nature of the tool, and the value it has, I won't be releasing the code for it. At least not yet. However, something I really enjoy is helping other traders, so I've decided to start producing charts across various markets that identify relevant S/R zones identified by this tool. At this point in time they'll be provided free of charge, but depending on the demand for multiple markets (and time frames), that may change in the future. Oh, and remember that zone I mention in the chart above? The one between 27.47 and 27.17? The one from 1995? See the comments below for an example of how it came into play 24 years later... If you have any queries please let me know. And let me know which charts & time frames (bearing in mind, like most things, the higher the time frame the more reliable the signals). DD
NYSE:TEducation
by DreamsDefined
HOW TO RIDE TRENDSThis educational idea refers to the last trading idea I published (linked below) and to many more I traded in the past. The chart above shows the BTCUSD going from about 6'500 at the beginning of April up to around 10'000 in early May and all the way back down to about 6'500 in mid-June. This idea shows how it was possible to ride the trend all the way up (4 buy opportunities) and all the way down (4 sell opportunities) with three indicators: the Breakout Pivotal Bars , the Sentiment Index and the Levels and Zones . Here's how they work to identify setups: Breakout Pivotal Bars • For break-ups the candle must be coloured in green. • For break-downs the candle must be coloured in red. • Blue candles mean indecision so either trend continuation or imminent trend reversal. Depending on your strategy it is possible to trade them or not. Sentiment Index Possible situations are: • Breakout (e.g. Bullish Sentiment in case 1 or Bearish Sentiment in case 8) • Divergence with the price (Bullish Sentiment in case 8) Levels and Zones Gives a reference in real-time to where the most significant levels and their corresponding long/short zones are. Let's see the 8 trading opportunities: 1. Break-up of consolidation (blue candle) + Break-up of Bullish Sentiment + Above Support -> GOOD OPPORTUNITY 2. Break-up of consolidation (green candle) + Break-up of Bullish Sentiment + Above Support -> GOOD OPPORTUNITY 3. Break-up of consolidation (blue candle) + Break-up of Bullish Sentiment + No Support nearby -> VALID OPPORTUNITY but pay attention 4. Break-up of consolidation (green candle) + Break-up of Bullish Sentiment + Resistance Above -> VALID OPPORTUNITY but pay attention 5. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment (divergence in Bullish Sentiment) + Below Resistance -> GOOD OPPORTUNITY 6. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment + Support is pretty far! -> GOOD OPPORTUNITY 7. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment + Support is pretty far! -> GOOD OPPORTUNITY 8. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment + Support is still pretty far! -> GOOD OPPORTUNITY
BITFINEX:BTCUSDEducation
by a.b
36
ANTICIPATING THE MARKETThis idea shows how the Sentiment Index indicator clearly anticipates big shifts in the Market. The first situation shows the EURUSD consolidating between late 2016 and spring 2017 – the consolidation was characterized by a consistent decline in the Bearish Sentiment which ultimately led to a strong uptrend until early 2018 (1500+ pips movement). The second situation shows the EURUSD in an opposite setup – a sligthly shorter consolidation charaterized by a decline in the Bullish Sentiment and a consequent breakdown of the pair.
Education
by a.b
27
Predicting market moves with JUST ONE INDICATORThis idea shows how easy it was to identify a massive opportunity on BTCUSD with the Levels and Zones indicator. Basically, after days of sideways movement, the pressure started to build up and ultimately a massive explosion took place! First, the Resistance Level moved significantly down (hence pushing price lower), then the Support Level made its move up (hence pushing price higher). Give it a few more time for the pressure to increase further (price is forced to move into a tight channel) and then the explosion takes place. You can find a similar setup before most of the major impulsive movements across any asset and timeframe. First, pressure builds up then, the explosion takes place!
BITFINEX:BTCUSDEducation
by a.b
41