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    Defining Leg Vs Base Candle: Leg-Base Isolation Method For Buy Zones and Sell Zones

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    rnumesh1
    The document defines base candles and leg candles, which are used to identify buy zones and sell zones in financial markets. A base candle shows equilibrium between buyers and sellers, while a leg candle shows imbalance. Buy zones are identified after a leg down candle is followed by base candles and another leg up candle. Sell zones are identified after a leg up candle is followed by base candles and then another leg down candle. The zones must meet additional criteria for strength and prior swing highs/lows to be broken for validation.

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    Defining Leg Vs Base Candle: Leg-Base Isolation Method For Buy Zones and Sell Zones

    Uploaded by

    rnumesh1
    265 views7 pages
    The document defines base candles and leg candles, which are used to identify buy zones and sell zones in financial markets. A base candle shows equilibrium between buyers and sellers, while a leg candle shows imbalance. Buy zones are identified after a leg down candle is followed by base candles and another leg up candle. Sell zones are identified after a leg up candle is followed by base candles and then another leg down candle. The zones must meet additional criteria for strength and prior swing highs/lows to be broken for validation.

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    Brandon-Leg-base-Zoning-Technique-2020

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    The document defines base candles and leg candles, which are used to identify buy zones and sell zones in financial markets. A base candle shows equilibrium between buyers and sellers, while a leg candle shows imbalance. Buy zones are identified after a leg down candle is followed by base candles and another leg up candle. Sell zones are identified after a leg up candle is followed by base candles and then another leg down candle. The zones must meet additional criteria for strength and prior swing highs/lows to be broken for validation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    265 views7 pages

    Defining Leg Vs Base Candle: Leg-Base Isolation Method For Buy Zones and Sell Zones

    Uploaded by

    rnumesh1
    The document defines base candles and leg candles, which are used to identify buy zones and sell zones in financial markets. A base candle shows equilibrium between buyers and sellers, while a leg candle shows imbalance. Buy zones are identified after a leg down candle is followed by base candles and another leg up candle. Sell zones are identified after a leg up candle is followed by base candles and then another leg down candle. The zones must meet additional criteria for strength and prior swing highs/lows to be broken for validation.

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    Leg-Base Isolation Method for Buy

    Zones and Sell Zones


    Created by Brandon Wendell, CMT © 2020

    Defining Leg vs Base Candle


    Candles can be categorized as either a base candle or a leg candle. This is separate from the Buy Zone and Sell Zone
    formations. Base candles represent equilibrium and a balance between buyers and sellers. Leg candles are showing an
    imbalance and movement in price.
    A Base Candle is one where the closing price of the current candle is within the range of the previous candle (between
    the high and the low). The range of a candle includes the high and low price. If the close of the current candle is at the
    high or at the low of the previous candle, it is still a basing candle. The wicks of the basing candle can stick out of the
    range of the first candle, but it is still a base if the close is within the range.

    A Leg Candle is one where the closing price of the current candle is outside of the range of the previous candle,
    (current candle closes above prior candle’s high or current candle closes below the previous candle’s low. Again, the
    wicks of the leg candle do not matter. It is a leg candle if the current close is outside of the previous candle’s range.
    Rally – Base – Drop Sell Zone

    The upper (topping) wicks of the basing candles can extend above the high of the leg-in candle.

    The upper line can be drawn at the highest price achieved by either the leg-in candle or the basing candles, whichever
    is higher.

    The top tail (wick) of the leg-out candle can enter the zone but cannot exceed the highs of the basing candles, if it
    does, the zone is invalid
    Drop – Base – Drop Sell Zone

    The upper (topping) wicks of the basing candles can extend above the high of the leg-in candle.

    The upper line can be drawn at the highest price achieved by either the leg-in candle or the basing candles, whichever
    is higher.

    The top tail (wick) of the leg-out candle can enter the zone but cannot exceed the highs of the basing candles, if it
    does, the zone is invalid
    Drop – Base – Rally Buy Zone

    The lower (bottom) wicks of the basing candles can extend below the low of the leg-in candle.

    The lower line can be drawn at the lowest price achieved by either the leg-in candle or the basing candles, whichever
    is lower.

    The bottom tail (wick) of the leg-out candle can enter the zone but cannot exceed the lows of the basing candles, if it
    does, the zone is invalid
    Rally – Base – Rally Buy Zone

    The lower (bottom) wicks of the basing candles can extend below the low of the leg-in candle.

    The lower line can be drawn at the lowest price achieved by either the leg-in candle or the basing candles, whichever
    is lower.

    The bottom tail (wick) of the leg-out candle can enter the zone but cannot exceed the lows of the basing candles, if it
    does, the zone is invalid
    Additional Qualifications

    Strength at the origin of the move

    The move out of the basing from the zone should not have any opposing pressure near.

    For a Buy Zone, there should not be any selling pressure, (red candles or topping tails) within two
    times the height of the zone extended away from the upper line of the zone.

    For a Sell Zone, there should not be any buying pressure, (green candles or bottom tails) within
    two times the height of the zone extended away from the lower line of the zone.
    Additional Qualifications

    Strength at the origin of the move

    The move out, (not just the leg out candle), from the basing from the zone should break a prior
    swing high or swing low.

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