MORE ON ZERO LINES
Ever since MightyOne introduced zero lines, I have been mulling it over. I think I "see" something. I wrote a histogram indicator to show HIGH - PREVIOUS HIGH and LOW - PREVIOUS LOW.
I have been reading some of Dan Millman's books. He speaks of "rules" or "laws". One rule involves "resistance" and another involves "balance". The light bulb started to flicker.
Newton's First Law of Motion:
I. Every object in a state of uniform motion tends to remain in that state of motion unless an external force is applied to it.
Newton's Second Law of Motion:
II. The relationship between an object's mass m, its acceleration a, and the applied force F is F = ma. Acceleration and force are vectors in this law the direction of the force vector is the same as the Direction of the acceleration vector.
Newton's Third Law of Motion:
III. For every action there is an equal and opposite reaction.
In physics, escape velocity is the speed where the kinetic energy of an object is equal to the magnitude of its gravitational potential energy.
It is commonly described as the speed needed to "break free" from a gravitational field (without any additional impulse). The term escape velocity can be considered a misnomer because it is actually a speed rather than a velocity, i.e. it specifies how fast the object must move but the direction of movement is irrelevant, unless "downward."
How can we use Millman's and Newton's laws to help us trade?
Price remains at rest until buyers and sellers act upon it.
Price channels until it escapes.
Buyers buy to:
1) enter a trade
2) cover a short for profit
3) cover a short for a loss
Sellers sell to:
1) enter a trade
2) sell for profit
3) sell for a loss
The previous candle's high represents the highest price buyers were willing to pay at that time.
The previous candle's low represents the lowest price sellers were willing to sell for at that time.
If price moves above the previous candle's high, either it will continue to go higher or it will reverse.
If price moves below the previous candle's low, either it will continue to go lower or it will reverse.
We can see price reverse when it makes lower highs and higher lows.
Price returns to the zero line to return a "balance" between buyers and sellers.
The first chart is the M5 and the second chart is the H1.
DO YOU SEE IT?
TO BE CONTINUED...