What is trading in the zone?

Trading in the Zone isone of the most classic books written on the topic of trading psychology. Lessons in this book are based on author Mark Douglas’s own experiences as a trader and trading coach, plus interviews with other top traders. The key takeaway? Your attitude towards trading matters just as much as your strategy.

Should you trade in a trading zone or a breakout trade?

The decision to trade in the zone or to have a breakout trade (execute buy or sell order when the prices breach the zone of resistance or support), depends on market volatilities. One of the tips for staying in the trading zone is to see if the movement is range-bound. Markets usually trade in a range as we see from the above graphic.

What is a zone on a stock chart?

Zones are simply an agreement between the green buyers and the red sellers on the current price. Stock prices are usually known to react to these zone areas when the price reaches these points on the stock chart. They act as magnets for stock prices to target.

How to identify trading indicators in the support zone?

To identify trading indicators in the support zone, there are a few defined systems traders can use. One is Fibonacci Retracement. This methodology is built around ascending, descending, and sideways channels. The technique draws parameters by percentages, from 0% at the support boundary to 100% at the resistance boundary.