Quote from tradingjournals:
Thanks for your answer. So essentially the method/theory, as I understand it, does not say what the implications of a break are on its previous assumptions. That is fine. My comments are not meant in spirit of positive intellectual discussion. I just wanted to know what the method does or does not do after a break takes place. In addition, I thought an anticipatory component could help it. I liked your posts, that is why I have responded to them. Thanks, and best to you as well.
I guess I just don't understand why you're asking these questions when you've been pointed towards their answers several times.
Gringo has been helpful towards you, and instead of spoon-feeding you the answers like you keep requesting, he is trying to help aid your personal growth as a trader so that you can achieve what you actually want.
We know that getting the answer to your question isn't going to help you, but what will help you is the process of taking ownership and developing a proficient enough understanding of market behavior to be able to answer the question yourself. I honestly would like to see you grow and succeed as well; I'm not trying to give you a hard time.
Also, I can give you a valid answer to your question, but in response, can you please explain what you are going to do with it? How will it help you if you are unwilling to put in the effort to study, understand, and test the concept and the related materials? This is the part I don't understand.
If the demand line fails and price breaks 40.4 decisively, it will mean that a serious shift of momentum between buyers and sellers is potentially taking place. A confirmation of this change would be a subsequent failure for buyers to make a higher high than 40.6. In addition, price falling through 40.2, and especially 40 could also serve as indicators of the strength of the down-move, if it occurs in the first place.
This is what the break of the line could indicate, and as to what one can do with it, as Gringo has said quite nicely, no one can provide a specific answer for you. One doesn't exist. What one can do with weakness in price is to short it. However, at any of the points I've listed above, as well as many others, a variety of things could take place that would change the entire landscape of the current price action, along with all of the possibilities of what might happen next.
Unless one understand all of these circumstances, is comfortable enough to interpret them in real time, and has tested specific parameters for trading all of those conditions, they're really not doing much more than playing a guessing game. None of this information can be used to predict the market, which is something I'm not sure you understand. We take all of the information that the market has presently given us, anticipate the possibilities, and... that's it. Once you understand what is happening, all that's left is just to do what the market tells you.
Your questions themselves demonstrate that you've yet to understand this fully. There is no answer to, "What does the line break mean and what can do with it?" Price could drop straight down through the line, and fifty seconds later it could hit 41. The price action is constantly changing; a static answer like the one you're asking for doesn't exist, and even if we take a stab at providing what you're asking for, what good is it?
