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> Friends:
>
> Can anyone offer any insight into mathematically identifying
> congestion, as in to set up for a breakout?
>
> Thanks
>
> Charles
IMO, congestion can be either a trading range or a ledge.
Joe Ross's rules for a ledge:
1. From 3 to 10 bars in length.
2. Characterized by a "squaring off" of highs and/or lows.
The limits of the ledge are set by two matching highs at least one
bar apart and two matching lows at least one bar apart. They need not
be the same bars. The match can be within one or two ticks. No bar in
the ledge should extend outside the boundaries more than one or two
ticks.
JFB
Shaven Heads Trading
NYC
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