Lecture on Marking Zones in Trading

Introduction

• Focus on the concept of zones in trading.
• Importance of marking zones accurately for AOI, 50% level, etc.
• Understanding how to make zones reliable even if they are not perfect.

Key Concepts

• Zones: Areas in trading charts that are crucial for making trading decisions.
• Imbalances and Splits: Other important concepts in trading strategy.
• 50% Line: A significant level in zones.

Drawing Zones

• Use a whiteboard for demonstration.

Demand Zones

1. Creation of Candles: Begins with price balancing and ends with a red candle.

   • Last candle is called a "basing candle" and should end red.
   • Three Parts of a Zone: Top, bottom, and middle (50% level).
   • Only Two Candles Matter: Ignore irrelevant candles.

2. Types of Demand Formation:

   • Falling down, balancing, then moving up.
   • Coming up, balancing, then moving up again.

3. Valid and Invalid Zones:

   • Valid: Proper basing size, acceptable wick size.
   • Invalid: Too large basing candle, excessive wick size.
   • Wicks should not exceed 50% of the candle height.

Supply Zones

• Opposite of Demand Zones.
• End with a green candle and aggressive move downwards.
• Wicks on top are irrelevant; bottom wicks matter.
• Similar concepts of valid and invalid zones as demand zones.

Marking Zones

• Demand Zones: Open to the lowest point of the wick.
• Supply Zones: Open to the highest point of the wick.
• Importance of not marking zones with battles or inconsistent wicks.

Examples and Chart Analysis

• Use various time frames to identify potential zones (4 Hour, 3 Hour, etc.).
• Analyze zones for validity: basing, wick size, and aggressive movement.
• Avoid zones with battles in the candles.

Practical Tips

• Smaller zones are preferable; avoid large zones due to increased risk.
• Validate zones through aggressive moves and minimal battles.
• Use different time frames for better precision.

Summary

• Understanding what constitutes a valid or invalid zone is crucial.
• Proper zone marking enhances trading strategy effectiveness.
• Next topics: 50% levels and parts of zones.

Conclusion

• Importance of marking correct zones.
• Re-watch video for clarity if needed.
• Ensure accurate charting and zone marking in trading practices.