I want to write about the things that you need to look out for when you are looking at a technical analysis course. Technical analysis is becoming more popular in trading and therefore so has the demand for courses.

To start with I will look at the things you technical analysis course should cover and then look at the delivery of the course. The are lots of key issues that I believe any course should cover. It is important that you find out if the course covers them before you sign up.

You want to be able to trust technical analysis and that is why you should understand the philosophy behind it. Charles Dow was one of the founder of this type of analysis so it is important that you understand how he used it. So that you fully understand the basic you need to go through the different charts there are.

Once the basics are mastered then your technical analysis course should move onto explain different types of patterns you see on the charts. These can be reversal or continuation. You will be surprised to see how often these can be seen.

A profitable method that people use is trending. You will see how using moving averages will help you spot a trend and then you will be able to use that to your advantage. This technique is used a lot in the markets.

Indicators such as volume and oscillators should be covered in a technical analysis course. These will give you more confidence in trusting the patterns that you are reading and help with the timing of your execution.

If we think about the deliver of the course now this is where you need to consider your preferences. How do you learn best? Do you prefer the theory or the practical aspect? Today we are lucky that we have so much choice when selecting a technical analysis course. You can do them in seminars, classrooms, from DVDs, books or the internet.

Congestion action trading is the topic for today.  A market in congestion action is one that goes back and forth between congestion confines , between support as well as resistance (or, in Drummond Geometry terms, between the dotted line and the block level ). It is market action that occurs within congestion itself , and when no trend run is occurring . The Dotted Line is the level created by the highest high of the preceding up trend , or in a down trend, the lowest low . In an uptrend the first bar that closes on the PLdot’s opposite side is known as the first Block Level, or the high of the very first bar on a down trend that closes on the other side of the PLdot.

After you have a working knowledge of congestion action trading theory, patterns, and characteristics , you can make a lot of money in this type of market . It is much like crop harvesting . Congestion action trading can be real bread-and-butter trading …. and even more, you can buy the table to hold the bread , and the house to hold the table , and for the house you can buy an estate, and a car, driver, plane, boat, and anything else you want . Basically , there is a lot of potential in congestion action trading , if you learn and apply all that is to learn about congestion action trading .

Congestion action trading – what is it ?

One effect of technical analysis explained with Drummond Geometry is that you have clear definitions . Price is either in a trend run or it is not . It is not is a trend run when after three or more closes on one side of the PL Dot it closes on the other side of the PLdot . The market is in congestion if it is not in a trend run . It’s all quite simple.

That first bar when price closes on the opposite side of the trending dot is the entrance bar of congestion . We can say that by definition the market is then in congestion . When congestion is first entered we know that a dotted line as well as a block level get created. The block level is the congestion’s first block level . Thus , the name for this market action is congestion action which gets started with the congestion entrance bar and goes on for a time that is not defined until on one side of the PLdot there are three closes, which is the start of another trend.

Let’s have a look at the limits of congestion and how they’re defined with technical analysis explained, and how they can expand .

Congestion action defines the parameters of congestion , which is also known as the confines of congestion .  You will remember that the confines of congestion are defined by the dotted line and the block level , and the congestion entrance bar is what establishes the first block level .  But these levels can be expanded . If the price goes outside of the block level or dotted line , while congestion is still in effect ( without three straight closes occurring on the one side of the PLdot), then price is redefining the confines of congestion and a larger congestion can occur. Before a new trend run occurs, this can happen various times.

We will continue this discussion about congestion trading in our next article in the technical analysis explained series.