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Stock Trading Course- Trading Congestion Action Part I
By plrprousers | March 10, 2010
We speak here of congestion action trading . A market in congestion action is a market that oscillates back and forth between the confines of congestion , between support as well as resistance ( or between the block level and dotted line in the terms of Drummond Geometry ). Within congestion this market action occurs, 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. In an uptrend the first bar that closes on the PLdot’s opposite side is known as the first Block Level, or in a down trend, the high of the first bar to close on the PLdot’s other side .
Once you have a sufficient understanding of the patterns, characteristics, and theory of congestion action trading, it can be quite lucrative . It is much like crop harvesting . Congestion action trading can really earn bread and butter …. and , you can purchase a table for the bread , and the house to hold the table , and for the house you can buy an estate, and the boat, care, plane, drivers, and so much more. In short , you have a huge potential to make money with this type of trading, if you learn and apply all that is to learn about congestion action trading .
Congestion action trading – what is it ?
One result of stock trading course this way through Drummond Geometry is that the definitions are clear . Price is either in a trend run or it is not . A trend run is not in effect when there are three or more closes on the same side of the Pldot and then there is a close on the other side of that PLdot. When the market is not in a trend run, then it is in congestion . Simple, and clear .
The first bar when there is a close on the trending dot’s opposite side is the entrance bar of congestion . We can say that by definition the market is then in congestion . We know when the market first enters congestion a dotted line as well as a block level get created. This particular block level if the very first block level of this congestion. This means, congestion action is the name for that market action which begins with a congestion entrance bar and goes on for a time that is indefinite until we see three closes on one side of the PLdot , which marks the start of a new trend .
Let’s take a look at how congestion limits are defined with stock trading course, and how they can expand .
The congestion action is what defines the congestion’s parameters, also called the confines of congestion . Keep in mind the block level and the dotted line are what define the confines of congestion , and the first block level gets set up by what is known as the congestion entrance bar. These levels can be expanded upon. If the price ends up going outside the dotted line or block level, while congestion is still in effect ( without three closes being on the PLdot’s one side ), then price is redefining the confines of congestion and we can see a larger congestion area established . This can continue several times until a new trend run appears .
We will continue this discussion about congestion trading in our next article in the technical analysis explained series.
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