The Drummond Lines

[Trader Question]

Also can ask you a question about something that's been nagging at me concerning the Drummond lines.
They've been defined as relating to the third bar. However, if the third bar doesn't happen to reach that area or blows through it and holds on close, and the fourth or even the fifth bar holds right on the extended line, is that still considered a valid support or resistance area?

C.C.

[pldot]

As to the lines.... yes, they project forward in time, to the "live bar", and represent support or resistance on that bar. Generally this refers only to the bar in question, but yes, we do find that sometimes valid support or resistance is sometimes flagged by indicators on past bars... particularly the 5/9s, and sometimes the 5/2s. When we see an accumulation of 5/9s in the same areas, likewise we can see the influence extending further into the future... "tons of 5-9s." A 5/9 holding on future bars is referred to as the "5/9 level..."

[ziad]

Good morning.

i have a question regarding support and resistance if its ok?
im looking at the daily and 4h chart for GBPUSD. If the daily chart breaks through the weekly 1-1 high, is it possible (or realsitic) to then use the weekly 1-1 high as the daily support? if im reading it right the price is still within the weekly 1-1 high zone.

thanks

[pldot]

Yes, if price has decisively broken through a 1-1 high then that 1-1 high can indeed thereafter be looked at as support, and if it is a weekly 1-1 high then it can be seen as daily support. The proof of this will come as you monitor the hourly price action as it tests this level....if valid then the hourly will show a decisive reaction to this new support level.

[BaliNekiJogi]

Hi Ted,

Please correct me if I am wrong. In P/L, we make decisions based upon close. If weekly 1-1H is broken on daily basis only, that means weekly 1-1H is not nroken decisively, not until weekly close, so we should not assume that weekly 1-1H can become support for daily reaction towards it, unless daily was a Friday.

[pldot]

If you were making a decision about the weekly bar, then you would wait until the close or very close to it. But if you are trading the daily bar then it is a different story and the weekly 1-1 high if broken can become support on daily.

[kanita]

Distribution is selling; this those bars which show a close a goodly distance away from the PLdot can be said to be manifesting "PLdot Distribution."
On this chart the bars E, F, & H show the greatest degree of movement away from the dot to the downside