Simple's Green Room

[pennies2007]

True Zone Tops and Bottoms...Example #2

Still on NU here. This zone was a bit trickier to set. Once again, I'm not necessarily interesting in absolute tops and bottoms. I want to know where the MAXIMUM number of hits reside, whether at the candle body or the candle peaks.

At the top, I have 4 shown. That one spike above the rest is to be ignored.

At the bottom, notice there is one instance where price moved well below the zone I have drawn in. Again, that should be ignored. That's not where the true zone bottom is.

At the low end, I have 4 distinct points where I can draw one trendline and have all 4 points intersect. That's my TRUE zone bottom.

Now just draw in the rectangle between the 2 points and you have another true CZ. Notice today that price came back up and stopped dead on within 1 pip of the zone bottom. That confirms that we have it drawn properly and that it is a true Supply zone.