1. Focus on a price level (zone)
It’s difficult to analyze the market without a focal point. If you look for turning points at every price level, you will only find confusion.
How do you know which price level to focus on? Which price levels are potential market turning points?
2. Observe what happened (happens) at the potential
Signs of strong demand
When the market tests a potential support, look out for:
Inability to clear below the support
Signs of strong supply
When the market tests a potential resistance, look out for:
Inability to clear above the resistance
Look for these price action signals in the past, as well as in real-time price action. The more signs you see, the more likely you’ve found a true zone.