⚓️ Logbook: Chapter III

In today's analysis, we will talk about levels and why they work.

THE SECRET OF THE HORIZONTAL LINE

We call a level a basic horizontal line. The secret of it is this: all traders draw it. It is a conditional tool used by everyone, so they consolidate their trades at such points.

The essence is that the chart for us is a common map that we all read, but we draw different conclusions. Therefore, let's fix: a level is a pathway on the map to a point.

DIAGNOSIS OF LEVEL STRENGTH

How to determine the strength of a level? Global levels on higher timeframes are fundamental. These are the zones that the price has passed with great effort; they are relevant both globally and on lower timeframes. These are the same 'golden zones' that we need to plan our actions.

The nature of the approach to this boundary is as important as the boundary itself. The nature of the approach determines whether the line will be broken or not. We will discuss this in a separate post.

"MIRROR" EFFECT🌊

The strength of a level increases with more touches, but the trick of levels is that sooner or later they are broken or the price bounces off them.

In this case, we call strong levels those that have been broken and changed their status: a strong resistance level after being broken becomes a support level. Such levels are called mirror levels.

We made a small outline to understand what a level is, and in the next post, we will talk about the nature of the approach to the level and what indicates its breakout and what, on the contrary, indicates a bounce. Thank you for your attention!

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Doubting the truth. ⚓️🖋️
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