monolisa wrote:Azuremaster, might be you can describe how you come up with the zlines on the chart. I am sure MO and others would be happy to help you.
I am in a same boat as you - I have readed NLA twice and am re-reading it again. Here's my interpretation of zline (attached chart). Basically the line help us to idenity the price that most traders got "zeroed out" at their BE level.
Hey Lis, I am re-reading the thread again (3rd time and on page 235 at the moment lol).
From what I have read here, here is my understanding of zline: we have increase of momentum to the upside. The candle body is 2x larger than previous body. That means, we have traders that went long in the Mighty zone- from the open to 50% of body. Any Zline in the Mighty zone is a true Zline. Zero line is a line where traders entered long and when price returns to ZL, traders have zero profit and exit. We take long here. Vice versa for shorts.
Now, from what I know. If we see increase of momentum, we know that there is demand at that area(big boys bought there). Usually they will try to bring the price down again to the entry area(or ZL) and to hit the stops of other traders and to buy some more. After that the price will go up. This is another explanation of Zline concept.
P.S. looks like your ZL was good for short but it never happened.