Simple's Green Room

[simplegreen]

GM Qui...a consolidation zone may differ from a supply/demand zone ..also SD zones often resemble support/resistance but the two are different in some cases...we are NOT looking for support or resistance..we ARE looking for bank and institutional action.They drive the market...we dont.we just want evidence of their presence then ride their coat tails for a profit.
Give you an example of consolidation or "support" after a nasty downtrend has been in progress...the longer the price hovers in a tight range the more risky the long would be even tho its already dropped a lot.Reason being that if most of the market was short and forceing price down then when the market enters consolidation it "looks" like support...but in fact the long hover time allows all those buy to cover trades to execute and if the same players refuse to go long after TPs then there are no buyers to drive price back up.If banks refuse to step in then the pair is defenseless against a continued drop after consolidating.
When an SD zone gets hit the reason its there is that banks have a lot of new or unfilled orders sitting there..if price rockets up after hitting the zone then very few of those buy orders got executed which leaves true support since a massive amt of buy orders stay unfilled at that price zone.This becomes a safety net for the traders.The reverse of all this is the way the Supply zone works.This BTW is my take on all this based partly on what those guys say but mainly on my experience in trading.I trade like these things are fact and never get starry eyed when long consolidation occurs..also I think its one big reason one never knows til after consolidation which direction the pair will break out to and one must be catious because first move up is noy always the time of breakout..the true breakout is the second move with momentum.The two moves will look like a W and if leg of W is shorter on right than on left then a long may be confirmed.
Theres a lot to it huh Qui?(LOL)