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There are 12 levels in total related to the
extreme levels (ELs) of a larger time compression. These involve
the weekly, which then expands to larger time compressions and
contracts to the smallest time compression known. The four
levels that are considered to be the basis comprise:
L The two outer extreme levels that surround the smaller time
compression trading ranges.
L The two inner wall areas that form within the two outer
extreme levels.
The outer extreme levels are referred to as the top extreme and
the bottom extreme levels. The inside levels are illustrated in
Figure 10.1 as two inner walls, indicating a measured trading
range with anywhere from 60 pips to 150 pips, depending on the
currency combination.
As mentioned, extreme levels are considered the outer levels of
a trading range; beyond these ELs are standard off-market levels
or rates that commonly offer a reversal point within a +/–
10-pip area either above or below the off-market rate. The
distance within the inner walls is where traders are most likely
to lose trades while using a traditional methodology, and this
is known as the “dogfight” section of the daily market.
Traders trading in this area feel that they must trade every day
and scalp or be a day trader, and as a result, they often begin
to see trades that are not present. These miragetype traders
lose money and become part of the 80 to 90 percent of historical
traders who fail.
If you can learn how to trade in this area of the inner walls
profitably, then you are more likely to be successful when the
market reaches the extreme levels (ELs). I
Courtesy of Concorde Forex Group, Inc. The extreme levels are
offered daily on CFGSmartCharts.
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They are horizontal lines automatically
placed and updated on the charts. suggest you trade several demo
accounts within this area of inner walls on a daily basis to
develop your personal trading skills, but save the live trades
for signals that have increased odds of your making a successful
entry and a profitable exit.
As mentioned earlier, the two extreme levels
indicate the outer range area of an
obvious overbought or oversold status, which offers traders a
possible reversal or bend in the market that is most likely a
predictable event. The extreme levels represent a larger trading
range, with smaller trading ranges contained within. Over the
years, I have noticed that this type of trading range seems to
float and shift every few days with a predictive nature. If the
top extreme level shifts upward, then the market seems to follow
within the week or so. Because determining the direction of the
market is probably the single most important consideration for
each trade entry, I believe this one indicator confirms what all
other signals are implying regarding direction.
Outside or beyond these outer extreme levels,
we use four off-market levels for
possible cost-averaging entries and/or new entries. What is
unique about these outer levels—beyond the extreme levels—is
that they seem to be seasonal and may change every fall or
spring for no apparent reason. Another unique feature about the
extreme levels, as well as about the off-market levels, is that
this is the general area in which a bend in the market occurs.
This type of knowledge is absolutely critical when merged More
about Extreme Levels in the Market 79 with specialty forex
trading signals and tools. It instantly increases your odds of
having successful entries in the market. |
