Tuesday, 3 March 2015

Proven Levels

We all know that DP's are proven levels where traders acted in the past and we expect them to act again at these levels and that is why they are proven levels.  However, sometimes market creates other proven levels during the day where we can expect traders to act again.  It could be any support or resistance level created during the day or a flip zone from where market kept bouncing off.  If we can identify such market proven levels during the day, we can successfully trade them with conviction like we trade the DP's and ranges.

On today's Nifty future chart I could find such proven level which acted as a strong Flip Zone.  Here is the chart and it is self explanatory.


As you can observe, prices were getting resisted at this Flip Zone in the morning.  Then around noon time it successfully broke this area and later came back to this same area to test it.  There was a PDH
as a DP above and also DP's like BRN, PDC below it, but it was difficult to trade there because price made a barb wire pattern around it.  This Flip Zone was clearly standing out and the price action proved it a "proven level."

4 comments:

  1. good observation ...
    thanks,
    zen

    ReplyDelete
  2. URD sir,

    I have just started studying ST sir's decision point system. I also have started following your blog regularly. I had 2 questions.

    1. Is your methodology same as ST sir's? I mean do you use a pure decision point system or do you combine that with other frameworks in price action?

    2. I see that you use ventura. I too use the same software for charts. I only can see intra day and historical charts. In intraday I can only see the current day's chart. In historical charts I can see charts for the past 7 days.

    In your chart above, how are you able to see a part of previous day's candles and the complete current day's candles.

    Thanks a lot for your support.

    Vivek

    ReplyDelete
    Replies
    1. Vivek

      I follow the same great system ST sir has introduced to this world in its purest form, i.e. the DP's and ranges.

      The chart I used here is the historical intraday chart provided by Ventura. You can also use the same.

      URD

      Delete