Is my Levels correct ? out of these two levels which level looks stronger and why ?
(This is a Gold ETF daily chart)
Hello godzilla!
Candle bodies or Candlewicks - that’s the question. The truth is that in the different situations they both have significant role in determining levels. The candlewicks give significant information about the volatility of the pair, while the bodies of the candle measure the strength of a move. If you would like to settle the neck line of a Double Top formation, it might be better to take the level, which indicates the candlewicks of the bottom between the two tops. In case of a bearish break through this level, this would make our entry more reliable. If you would like to determine a support level, in this case it might be better to use the area between the two levels as a support zone.
In your case, the both levels look important. As a support, we might want to look at these levels as a whole area, while if the lower level gets broken, that could be taken as a confirmation of the big Double Top.