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Unlock Trading Levels - a Winning Trading Strategy for CFD Trading and Share Trading, 13 Dec 2016

Unlock Trading Levels - a Winning Trading Strategy for CFD Trading and Share Trading, 13 Dec 2016

Trading-Levels-Educa...

 

Unlock Trading Levels - a Winning Trading Strategy for CFD Trading and Share Trading

Much more detail on the Trading Levels concept HERE

 

Because the Trading Levels deliver a great insight into market support and resistance, you will have a much better understanding where to trade your trades from and to. Today we’re showing you how to unlock the key patterns that occur at large price points, which I call the TradingLevels.

Large numbers tend to act as targets for traders especially CFD Traders)– they could be exiting at larger numbers/price or getting in – which in turn causes corrections and there are some basic pattern that occur at these price levels.

I have broken down the patterns into two categories, the most common is the Classic Pattern, which have a few variations, and we take a look at two of them today.  The other pattern is the Overshoot Pattern. Once you understand these basic patterns your timing of entries and exit will improve.

 

Using Trading Levels  to Understand and Identify Corrections

Corrections tend to occur at the closest, largest numbers; they are continuation patterns, just a pause along the way and if your attention is at the next largest number you can use that price point as a place to exit the trade or as tested support after the correction as the next entry. I’m not here today to talk about volume, but it is important to understand that the volume during the correction should be lower volume than the previous uptrend – lower volume through the corrective process confirms to you that the retracement is a correction, the volume confirms the price action/ pattern.

 

CLASSIC PATTERN 1: The most common pattern

Trading-Levels-Educa...

Classic Pattern 1: is an unfinished pattern and this is what is expected next…
This is also a large Classic Pattern at this Major TradingLevel 5 (TL5).

The FMG chart below is a smaller version of this pattern – they come in all different sizes and it will take time to figure this out, but once the pennies start to drop and you become clear on the pathway of the structure your trade set- ups will improve as this helps improve the overall timing.

FURTHER NOTES
The TradingLevels compliment Elliott Wave patterns. In the case below (CSR Chart) we are already long in this stock, because the ‘Reaction’ is in three waves an ABC corrective pattern, so I know new highs will be made. The trend up as the first high above the level, is always in five waves (impulse). PPT Chart  demonstrates an Trading Levels Classic Pattern (unfinished) and Elliott Wave.


EXAMPLES

2016_12_13_FMG-Class...

2016_12_13_CSR_Happe...

2016_12_13_PPT_Unfin...




CLASSIC PATTERN 2:  a variation on the Classic Pattern 1
 

Trading-Levels-Educa...
 

The Classic Pettern 2 is simpler, as it finds the level as support and doesn’t move below, so it’s important that the entry in all patterns is above the first high above the level and of course the next Trading Level is the exit.

It’s much safer to buy a pullback in a uptrend, rather than buying lows, so its very important to have the right set up from the lows and in this case (see ORG Chart below) you can see the support is on the TL5:$5.00 and we have bought from the last high.

Examples

2016_12_13_ORG

2016_12_13_DOW_Varia...




OVERSHOOT PATTERN
 

Trading-Levels-Educa...
 

The Overshoot Pattern is where the market doesn’t react to the price level and moves straight through. This is a rather small example and the swings can be much larger. As a rule of thumb when the market doesn’t stop at the Level and moves above, is roughly the distance you can expect the market to swing back below the Level. And it’s best to think of the price level as the balance line for the corrective pattern.

The rules are, you would trade to the level (i.e. here, TL5: $5.00) and exit and then simply wait for the next setup at the Level, that is buying a new high above the Level and placing the stop below the Level.

Examples

2016_12_13_DOW_Overs...


 

Much more detail on the Trading Levels concept HERE
 

Get TradingLevels AND Elliott Wave forecasting and realtime education everyday with a
Trial Membership to TradingLounge for 2 weeks – with 3 options!


 

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