the lowest close and the lowest wick I always draw lines from both places Now when I am using a congestion area or consolidation band as an anchor for my support line I do the same thing I draw one line from the lowest close and one from the lowest wick and sometimes I draw additional lines around those areas as I see the need In the end though based on my experience it will be the line drawn from the lowest wick that has the most importance Look at the chart below I have drawn two support lines from the same bottom One is anchored to the bottom of the wick the other to the close of the day
Moving forward we can see that both lines act as support but the upper line the one anchored to the close is broken more often and by greater amounts This could lead to unnecessary false signals and losses especially in a strong market where the breaks may be even more pronounced gold trust support Now Binadroid let’s look at another chart I have drawn two support lines from a congestion band This is an area of consolidation and trading that is more or less within a tight sideways range I drew my lines from two likely candles both at the bottom of the wick creating a support zone that projects out to the right We can see almost immediately following there is a test of support in which not only one but both lines play a role and the zone between them The first candles breaks the upper and lower support lines with a
nasty bearish candle This bearish candle is apparently being confirmed by the second candle the déjà which forms beneath the upper line but still within the overall support zone Then the third and confirming candle tests support again before it completes the bounce and takes prices back above the
upper support line I hope that this example helps to drive home the importance of waiting for a confirmation If you were to use only the upper line or make your trade based on the second candle (the déjà) or even before the close of the third candle you may have been led to a bearish trade xli support zones Rating: 005 (0 votes cast) 0 Related posts: Two Rules For Support And Resistance How To Draw The Best Trend Lines Day Wave Trading With Fibonacci Retracements Trading Both Sides Of The Chart – Down Trends How To Set Up A Day Trade Using Fibonacci Retracements Comments by Vanilla 6 Visitors Online Now Live Chat 8am - 4pm EST Click to Join Best Binary Options Brokers Markets world Markets world Trade Now IQ Option IQ Option Trade Now 24Option Trade Now Navigation Minimum Deposit Binary Option Brokers Bit coin Binary Options Binary Options Auto Traders Binary Options Bots Binary.

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