Lesson 5 - Tools of Strategy, 's and PPZ's

Introduction

       So we almost reached the last element of the strategy, now it's 's and PPZ's turn. Firstly, let's see what do they mean.

BRN: Big Round Numbers. BRN's have a big influence on the price movement. We are humans, and we like using round numbers because it's just easier. It will be seen on next charts.

PPZ: Price Pivot Zones. Dynamic support/resistance, which can help really when placing an SL.

How to draw a proper BRN?

     Big Round Numbers are less subjective than other tools, but still. BRN's can be placed at every 100, 500, 1000, representating price more likely to reverse here and start moving toward the opposite direction.

Don't underestimate the power of BRN's! A common, but powerful tools of TA. Combinating with price action, can bring great signals about how strong the momentum is (when get through a BRN), can help placing the SL aswell.

     Certainly, BRN's do not work everytime. The chart is just a presentation, showing it's worth to check big round numbers a few times when managing a position.

Can be used and advised on lower timeframes placing at every 100 pips aswell.

How to draw a proper PPZ?

     Price Pivot Zones are zones where price use to reverse and use to be a strong level. Placing the SL below or above PPZ's + X pips can be a good choice.

Timeframe I usually draw a PPZ on are M15, H1, H4, D1. Let's see some examples:

How to implement?

     I integrate PPZ's and BRN's the same way: Supporting other levels. The more tools support a level, the stronger the level, the tighter the stoploss, the better Risk Ratio.   

Have a question about the tool?

    Ask without any hesitate!

(Written by Stockwalker 16th of June)