We speak here of congestion action trading . A market that is in congestion action is one that swings back and forth between the confines of congestion, between resistance and support ( 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 no trend run is occurring . 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 first Block Level is the low of the first bar that closes on the opposite side of the PLdot in a uptrend , or the high of the very first bar on a down trend that closes on the other side of the PLdot.
Once you have a sufficient understanding of the patterns, characteristics, and theory of congestion action trading, you can really make money. It’s a lot like harvesting a good crop. You can earn your bread and butter with congestion action trading…. and , you can buy the table to hold the bread , and the house to hold the table , and then an estate for the house , and the boat, care, plane, drivers, and so much more. Basically , you have a huge potential to make money with this type of trading, if you take time to learn everything you can about it .
Congestion action trading – what is it ?
One outcome of stock trading course in this way with Drummond Geometry is that you get definitions that are very clear. 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. When the market is not in a trend run, then it is in congestion . It’s very clear and simple .
The first bar when there is a close on the trending dot’s opposite side is known as the congestion entrance bar. Then, but definition, there is congestion in the market. When the market first goes into congestion a block level and dotted line are created . The block level is the congestion’s first block level . Thus , 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 , showing the beginning of a new trend .
Let’s have a look at the limits of congestion and how they’re defined with stock trading course, and how they can expand .
The parameters of congestion are defined by congestion action , which may be called the confines of congestion. You will remember 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 . These levels can be expanded upon. If the price goes outside of the block level or dotted line , 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.
