In this video, we´ll explain compression in trading what is it and what causes price compression, as well as to demonstrate how to identify it.
Trading Compression – the compression is a price movement that indicates the weakness of the buyers or the sellers. Price compression is a very slow price movement that indicates weakness on buying and selling orders.
By this type of movement, the price collects all pending orders on its way up or down and leaves no unfilled orders behind it.
Compression is usually defined by small and messy candles that move up or down in a very tight range.
In this video, we will undercover the most important principle when trading price compression: To trade in the opposite direction.
We´ll learn how to combine support and resistance levels to build a successful strategy around it. Also, what to do if you find yourself inside a compression… Take profits?, Trail your stop? Think about the advantages of riding the sharp movement that comes after compression: very quick you are in profits, so mentally is easier to let the trade run longer.
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