Welcome to our site Farm Supply Ranch. Don"t forget to bookmark this page Stock Bar. If you found what your looking for, please remember to click an appreciation button above for this page.
Stock Bar

Trading Congestion Action and Stock Trading Strategy Part 2
Let's further discuss congestion action trading in our series on stock trading strategy.
Until a new trend run occurs, congestion cannot be exited . Congestion occurs if there is no trend run . A congestion exit is a trend run as established by the previous action of congestion .
Let's use emphasis that is a bit different and say this again .
Congestion action can be said to do two different things.
One: It creates strong original confines .
In the second place, strong expanded confines are created .
The original confines are created by the congestion entrance bar , which is the first bar of congestion action , and the next bar, which is the second bar of action , and the third bar if a trend run doesn't occur. The lowest low and the highest high of the bars is what determines the confines, as are defined by block level and dotted line. These are the congestion original confines .
Here it should be pointed out that the third bar of congestion, price , ends up doing one of two things. Price either:
1) Starts a trend run and exits congestion, since the third bar closing on the PL dot's other side doesn't confirm congestion action . The congestion confines are then determined by the original confines , as set out by the highest high and lowest low of the first two bars . OR...
2) The close happens on the other side of the Pl dot, and thus continues congestion action . Original congestion determines the confines of congestion in this case , as is set out by the lowest low and highest high of the very first three bars.
So, what about expanded confines?
Well, congestion action can create expanded confines by moving out of any confines of congestion like original confines , providing that there has been no trend run in the meantime . The confines of congestion is defined when the price leaves the latest confines . From then on, then congestion exit will deal with this confines that is redefined instead of the original confines .
( Of course, it should be noted , that the original confines can have an effect on price , since any line or level can do so , but generally speaking , repetitive congestion action can build up the true confines , without a trend run appearing .)
As long as there is no trend run, the confines can be expanded . Only when price moves into a trend run and exits congestion can we really say that the congestions final boundaries have been defined .
If you look at Drummond Geometry, stock trading strategy defines the congestion in a manner that is consistent and clear, and gives us a framework that we can work with in identifying the confines of congestion under any circumstance .
In future articles in this stock trading strategy series we'll look closely at congestion entry and exit. It will definitely be useful that we have the clear definitions of congestion.
If you are looking for a different item here are a list of related products on Farm Supply Ranch, please check out the following:
































































































