Levels Market is one of the simplest, but no less effective tools from this. Pivot points can be built from these levels, levels are constructed as statistical significance at a given point in time. Trading by levels is a classic in the work of a trader. You can use them as a ready-made trading strategy or as an additional filter in your trading system. In the settings you can specify the offset for building levels.
Interpretation of levels:
- Lines 8/8 and 0/8 (Final Resistance). These lines are the strongest and provide the strongest resistance and support.
- Line 7/8 (Weak, a place for a stop and a turn). This line is weak. If the price went too far and too fast and if it stopped near this line, then it will turn quickly down. If the price has not stopped near this line, it will continue to move up to 8/8.
- Line 1/8 (Weak, place to stop and turn). This line is weak. If the price has gone too far and too fast and if it has stopped near this line, then it will turn quickly up. If the price has not stopped near this line, it will continue to move down to 0/8.
- Lines 6/8 and 2/8 (Rotation, U-turn). These two lines are inferior in their strength to only 4/8 in their ability to fully expand the price movement.
- Line 5/8 (Top of the trading range). Prices in all markets spend 40% of the time moving between 5/8 and 3/8 lines. If the price moves near the 5/8 line and stays near it for 10-12 days, the market said that it should be sold in this “premium zone”, as some people do, but if the price continues to stay above 5/8, then it and will remain above her. If, however, the price falls below 5/8, then it is likely to continue to fall further to the next level of resistance.
- Line 3/8 (bottom of the trading range). If prices are below this line and moving up, then the price will be difficult to break through this level. If you break this line up and stay above it for 10-12 days, then prices will remain above this line and spend 40% of the time moving between this line and the 5/8 line.
- Line 4/8 (Main line of resistance / support). This line provides the most resistance / support. This level is best for a new purchase or sale. If the price is above 4/8, then this is a strong level of support. If the price is below 4/8, then this is an excellent level of resistance.