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CONGESTION PHASE

How do we identify the congestion phase which is a base for setting up a price action ?

By identifying the pivots.

When do the Pivots usually formed ?

1. Identifty the support & resistance.

2. If we are a long term trader/Investor check for Monthly pivots, Medium trader (weekly pivots) and short term daily pivots & for intraday hourly pivots.

3. So what is Pivot ?

The Pivot is formation of 3 candles as below

Bullish trend - Bearish trend

P1 High is lower than P2 High

P3 High is lower than P2 High

P1 Low is lower than P2 Low

P3 Low is lower than P2 Low.

Forming an evening start at the top of bull trend.

P2 high is the ceiling

P1 low is the floor.

If the price breaches the P1 with high volumes then the stock turned to be bearish.

Similarly

P1 Low is higher than P2 Low

P3 Low is higher than P2 Low

P1 High is higher than P2 High

P3 High is higher than P2 High

Now if the Ceiling is P1 high & Floor is P2 Low

If the price breaches above P1 with good volumes (substantially rises) then trend reversal is confirmed & shall plan for an entry

So the congention phase can be identified by knowing the Pivots at support and resistance.