Today we’re going to talk about congestion action trading . Congestion action in a market is one that goes back and forth between congestion confines , between support and resistance (or, in Drummond Geometry terms, between the dotted line and the block level ). It is market action that occurs within congestion itself , and when no trend run is occurring . The level that is created by the highest high of the up trend that preceded is the Dotted Line , or the lowest low created by the preceding down trend . The first Block Level is the low of the first bar that closes on the opposite side of the PLdot in a uptrend , 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 congestion action trading theory, patterns, and characteristics , you can really make money. It is like harvesting a crop, or slaughtering the fatted calf . Congestion action trading can really earn bread and butter …. and even more, a table to hold the bread can be bought, and the house to hold the table , and the estate to hold the house , and the boat, care, plane, drivers, and so much more. Essentially, there is a lot of potential in congestion action trading , if you take congestion action trading and learn all you can.
What is congestion action trading ?
One outcome of emini trading this way through Drummond Geometry is that you have clear definitions . You either have prices in trend runs, or 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. If there is no trend run, then the market is in a congestion. Simple, and clear .
The first bar when there is a close on the trending dot’s opposite side is the congestion entrance bar . Then it can be said that the market is in congestion by definition . We know when the market first enters congestion this creates a dotted line and a block level . The block level is the congestion’s first block level . Thus , 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 .
Let’s take a look at how congestion limits are defined with emini trading, as well as how expansion can occur .
The congestion action is what defines the congestion’s parameters, which is also known as the confines of congestion . Keep in mind the confines of congestion get defined by the block level and dotted line, and the first block level gets set up by what is known as the congestion entrance bar. These levels can be expanded upon. If prices goes outside the dotted line, or outside of the block level , while still in congestion (that is, without showing three closes on one side of the PL Dot ), then price is redefining the confines of congestion and there can be established an even larger congestion . This can happen several time before you see a new trend run .
Next time we’ll talk more about congestion trading in the technical analysis explained series.
