Everyone keeps asking me how to construct the BBZoneā¦
First of all let me explain exactly what the BBZone is (BULL/BEAR Zone), its really just the area on a chart that if held, keeps the current bias in place, but if broke and held, then the bias shifts.
Its similar to a correction zoneā¦ a correction zone in my view and how I was trained from other city traders was the 38-50% fib levels. This was the standard correction zone.
The difference between a BBZone and a correction zone is minorā¦ the BBZone does not have to include the 38 nor the 50% fib levels. The BBZone can use the 23% or the 61% or the 38 and 50%.
The BBZone is just a confluence area, that tends to combine fibs, support/resistance, MAās, neck lines of chart patterns, or previous break points. It does not have to include everything that I have just mentioned!
What you are looking to doā¦ is define the current direction using the 100-200 SMAāsā¦ who is currently in control of the market?
Once you have established this, you are then looking for an area that you deem will attract the pro money, heres a clueā¦ Buy low, Sell high.
When the BBZone or correction zone is testedā¦ie: hit, or price trades within the zone, then you are looking for it to hold and send price back on it holidays in the original direction.
But if the zone fails to produce the hold, and price breaks below and holds below, then you can anticipate the bias change, and therefore take the trade in the other direction.
So what do I look for when constructing the BBZone each day?
Well personally I tend to look for any of the fib levels that are trading close to or at one or 2 of the MAās and Iām also looking to see if this area is located within a technical support/resistance area, or previous break point, or maybe its a neck line of a chart pattern or something.
Really Iām looking to construct a zone with various confluences that are within close proximity to each other. If I define the market is currently in the hands of the bulls, then my BBZone will be located at a lower price (buy low). If I have defined the market is currently in the hands of the bears, then my BBZone will be at a higher price (sell high). There is only 1 BBZone on the chartā¦ there is never multiple zonesā¦just one at a timeā¦ you are located the pro money zone that will attract the professional money and not the retail money.
I will be covering this in more detail very soon, but most of the training will come each day when I post my analysis charts in the mornings and afternoons.
