Thanks so much for getting back to me!
Honestly don’t worry about it.
I am trying to fathom out if the no of pips are too big for some t/f’s that makes the chart look to cluttered. I have attached line and candlestick chart of BTC to showcase the issue of cluttering.
Line chart:
Candlestick chart:
I used line charts as you mentioned in one of your posts about lining up the peaks and valleys on the line and then adjusting it on candlesticks chart.
2. The green zone is the demand zone which bring me to another question – since price has touched the demand zone twice, does it make it likely we’re going to break it down on the 3rd attempt since S/D zones are best used when fresh and do you use volume at all?
3. At the same time, I’m also wondering if ‘banks’ have taken profit after that demand zone I have highlighted (HH was made from that demand zone so it still looks like it wants to continue higher) and are now filling their orders to pump again to make another HH because it seems like there is a good reaction upwards every time the market reached that demand zone? (if you see the 2nd touch on the demand zone, it only went slightly lower than the 1st touch as Banks want to fill their orders at similar prices).
As you can see, questions 2 and 3 are contradicting each other.
However, my bias is to the upside as Banks can take up to 4/5 times (if im correct?) to fill their orders and bias is still up due to HH made with demand zone still intact and the MACD is showing bullish divergence
Please do let me know if I am doing anything wrong.
I look forward to hearing from you.
Kindest regards
Response:
So, here are my thoughts on your questions:
The number of pips is fine.
The issue is the overabundance of levels creating clutter.
Consolidations aren’t ideal for support and resistance zones due to their many levels. I suggest marking only the supply and demand zones, using the S & R zones during trends for retracements. Remember to include nearby reversals when marking S & D zones.
Your zones need to account for where the banks are likely to buy and sell.
In a trend, your concept would apply.
But in a consolidation like yours, it’s different.
Consolidations involve multiple trades from banks, so each touch doesn’t necessarily weaken the zone. In trends, banks usually place two to four trades maximum, with the break often occurring on the third or fourth touches.
It seems like profits have been taken, but I wouldn’t consider the HH a genuine higher high, as the broken high didn’t instigate a significant down move; the prior one did.
A HH suggests a rise only if it breaks the previous high where banks sold a large volume of currency.
Also, HH/HL LL/LH don’t hold much weight during consolidations.
Look for one massive candle or a series of large candles for predicting breakout instead.
Cheers,
PAN.