What are momentum and contraction zones required for?

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Cathy Dennis
Answered 2 months, 4 weeks ago
<p id="isPasted">In trading, "momentum zones" (often visualized as areas on a chart) help traders identify potential entry and exit points, as well as assess the strength and direction of a trend. These zones, which can be identified using technical indicators like moving averages or other momentum-based tools, provide a visual representation of the current trend structure and suggest where price action might be most likely to change direction.&nbsp;</p><p>In trading, contraction zones, also known as "VCP" (Volatility Contraction Pattern), are used to identify periods of low volatility and potential breakouts. They help traders anticipate turning points or areas where trends might …</p>