How to use congestion zones to trade

Congestion zones are areas in the charts that have seen much trading, says John C Burford. Here's how to turn these areas to your advantage.

This will be my last post this week. I shall be speaking at the London Money Show on Friday and will be back in on Monday.

For this post, I will analyse the chart of a stock I follow Goldman Sachs (NYSE) and go through the process I use when I go over a chart for a possible trade.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.