CHOP ZONE: Which of the three trends would you want to trade?
Understand what a market cycle is:
#1 Accumulation
#2 Markup
#3 Distribution
#4 Markdown
And REPEAT.
Would you rather trade in the Accumulation --> Markup--> Distribution phases or in the Markdown phase? The markdown phase is sometimes called the Chop Zone. Meaning price will bounce around in ranges without going up or down until a major move in price is made outside the Chop Zone.
#1 Accumulation
#2 Markup
#3 Distribution
#4 Markdown
And REPEAT.
Would you rather trade in the Accumulation --> Markup--> Distribution phases or in the Markdown phase? The markdown phase is sometimes called the Chop Zone. Meaning price will bounce around in ranges without going up or down until a major move in price is made outside the Chop Zone.