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Ignored Levels
CREATED: SATURDAY, 29 APRIL 2017

IGNORED LEVELS – Another important Decision Point

A level which is ignored or not respected can act as a wonderful place to look for a trade. By now
you would know that we trade at the limits of a ag which are the kinks of a barrier which have
broken, Failed to Return (FTR) and met its rst target. Once the rst target has been met. It
becomes a Flag Limit (FL)

These barriers are;

- The break into or out of Compression (extremes of CP)

- Highs and Lows (S/R)
- Left shoulders (LS)

The before mentioned barriers and their respective FL’s act as an edge of a Price Action Zone (PAZ).
If you are still unclear of what a FL is, please stop here and go back to the FL lesson.

Now, let’s have a think about what we expect to happen at these levels. We assume there to be some
type of bounce. If price slices beyond the level like a hot knife through butter, with no reaction what
so ever, we need to ask why is this so? With this question at the forefront of our mind and our
understanding of order ow we can deduce that if it’s ignored on the way through then on the
revisit to the area, the FL may have a reaction. Therefore, these Ignored areas which become FLs
within themselves could be great areas for a trade or target. These areas are;

Ignored (break in or out) Compression (iCP)

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Ignored S/R (iSR)

Ignored Left Shoulder (iLS) These may also be Ignored Quasimodo Level (iQM)
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Although all these areas ought to be considered for a conservative rst target some will be better
candidates than others for an entry. If you want to rank them in order of how effective they are. You
may nd the iLS/iQM to be the more effective for price bounces or reversals, with iSR somewhere
in between and usually the iCPs to be the weaker ones. I must stress that even the weaker ones
ought to be considered for a conservative rst target. Like everything else, these levels do not mean
you can negate analysis covered in other lessons.

A broken level does not mean an ignored level 

Just because a level breaks it does not mean it has been ignored. If we do not understand the
difference between ignored and used up, then our analysis will never be consistent. For us to make
this determination lets cast our mind back to what has been said about FLs. We know that for a FTR
to be considered a FL price MUST hit the opposing rst target. So, it’s only logical to also apply this
to ignored levels. Meaning, if price hits an area, reacts and does not hit the opposing target, we can
consider it an ignored area.

Conversely, if price hits the area and bounces back to the opposing rst target then it cannot be
considered ignored.
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See below for an example of analyzing an area to determine if it is ignored or used up. Keep in mind
this applies across all nancial instruments, pairs and timeframes.

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Article by "Edge"

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