Trading Congestion Action – Stock Trading Course (Part 1)
Today we’re going to talk about congestion action trading . A market that is in congestion action is one that swings back and forth between the confines of congestion, between support as well as resistance (or, in Drummond Geometry terms, between the dotted line and the block level ). This is action in the market that happens in congestion , 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 .
After you have a working knowledge of the theory, characteristics, and patterns of congestion action trading , it can be quite lucrative . 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 a house for the table , and the estate to hold the house , and a car, driver, plane, boat, and anything else you want . Essentially, there is a lot of potential in congestion action trading , if you learn and apply all that is to learn about congestion action trading .
What is congestion action trading ?
One result of stock trading course this way through Drummond Geometry is that you have clear definitions . You either have prices in trend runs, or not. When after more than three closes are on the PLdots one side and then it closes on the PLdots other side, this is not a trend run . When the market is not in a trend run, then it is in congestion . It’s very clear and simple .
When the price ends up closing on the other side of the trending dot, the first bar is the entrance bar of congestion . Then, but definition, there is congestion in the market. When congestion is first entered we know that 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 what this market action is called which starts with a congestion entrance bar and continues for an indefinite period of time until we see three closes on one side of the PLdot , which is the start of another trend.
Now let’s look at the way the limits of congestion are defined with stock trading course, and how they can expand .
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 congestion entrance bar is what establishes the first block level . But these levels can be expanded . If the price goes outside of the block level or dotted line , while congestion is still in effect ( without three straight closes occurring on the one side of the PLdot), then price is redefining the confines of congestion and we can see a larger congestion area established . Before a new trend run occurs, this can happen various times.
We will continue this discussion about congestion trading in our next article in the technical analysis explained series.
