I fVMii

You will see the one above many times.

This next one is a valid entry for any major or intermediate signal.

Yesterday's, high ii

^^Buy a breakout of yesterday's high.

Note the retracement to yesterday's congestion. There were not enough ticks available between yesterday's congestion and yesterday's high to warrant an entry prior to a breakout of yesterday's high, today.

This is one of the best trades I can make: A wide congestion followed by a pop, followed by a narrow congestion. This type of signal is valid on any major or intermediate entry signal.

Sell the breakout of

It wouldn't have made any difference as to the direction of the POP. It could haue looked like this:

Narrow congestion


Yesterday's lou->

at the breakout of yesterday's low.


Sell the breakout of the narrower congestion , uith an optional sell at a breakout of the low

Here is a summary of patterns:

A gap above yesterday's high, but below one or more of the past three days' highs:



j NO TRADE? Because, Today's / retracement , v openVV into prior congestion.

Vesterday s high "VsAAA/W

Day 3

A gap, retracement through congestion, and then a breakout of the highs.


Day 2 N


/www 0F THE high

Day 3

Day IV Day 4

This narket traced back to the middle or through the prior congestion.

A gap, a retracement to the highs of the congestion nearest yesterday's high. Then a congestion today, and a breakout of today's congestion which is closer to yesterday's high than was yesterday's congestion. Trade the breakout of the higher congestion if the two congestions are equal in size from top to bottom. Otherwise trade the breakout of the tighter congestion.

When prices open at a new high above the last three days:


Gap open to a neu high for the last three days. No retracenent to any prior congestion of the last three days. NO TRADE!

Gap open to a neu high for the last three days. Retracenent to niddle or bottom of any prior congestion of the last three days. OK TO TRADE?


Gap open to a neu high for the last three days. Retracenent through any congestion of the last three days with subsequent breakout back in the direction of the gap opening. OK TO TRADE!

Gap open to neu high for the last three days. Retracenent to niddlej botton, or through any congestion of the past three days. This followed by a congestion of equal height today. TRADE A BREAKOUT OF THE HIGHER OF THE TUO CONGESTIONS?

Do the reverse of all these uhen going short.

If a congestion is right at a previous high or low, there must be a retracenent to at least the niddle of the congestion before trading the breakout.

/vvv\ V Breakout of yesterday's congestion at the high.

Sonetines the congestion nearest yesterday's high cones today.

Often, there is no gap.

C_\ 1 want a trade through the congestion area no natter which side it is on relative to today's open.

Sell the breakout of the congestion and optionally sell a breakout of the low.

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