The immutable truth is that markets move from level to level. If so, then it is a good idea to wait for the price to approach the level and place orders at the moment of reaching the level. The development of the situation when approaching the level may be as follows:
The breakdown of the level;
Rebound from the level;
False level breakdown.
Therefore, we need to take into account all these three possible scenarios when submitting an application.
The level is the price to which the market inevitably returns like a magnet. The nature of the formation of levels is very simple – a large player is usually interested in a certain price at which he wants to gain or lose a position. Until he does this, he does not let go of the market.
Let’s consider a number of examples.
Figure 101. Altcoin futures CELRUSDT, accumulation of a position at the price of $ 0.08.
In Figure 101, the typical level is the price of $ 0.08. We see that the level manifested itself in volume 1. In volume 2, the price returned and stayed in the zone of this price until volume3 and then collapsed down, but then it was pulled up again in volume 4 and only then finally collapsed down.
The strategy here is quite simple: buy below or at the level, sell above the level.
Fig.102. Bitcoin futures.
The following example in Fig.102. Bitcoin has formed several important levels at once: 30000$, 35000$, 40000$, 47000$ ( you can specify the level of $ 45,000, because it begins to dominate after T.8). We see that the strongest is the price of $ 30,000, because the price bounces off it by the most large values (see vol.1, vol.2 should confirm our version in the very near future). In vol.3. vol.4, the level of $ 35,000 began to manifest itself, which before vol.5 was like an unshakable wall. In vol.6-9, the level of $ 40,000 proved itself. At this level, a major player preferred to gain positions several times. At the level of $ 47,000, a large player gained a position at points 10.13, and at t.14 he began to reset a large position. Different authors can see different approaches to determining the price of the level. Our opinion here coincides with the opinion of A.M. Gerchik – the maximum number of touches and round numbers that are easy to use for calculation.