Lesson #3 - Lime & Yellow
Lime and Yellow levels are important levels associated with Futures contracts. These levels indicate key points where significant transactions have occurred, regardless of the current price level. As the names suggest, these levels are tied to futures contracts and do not necessarily reflect the current market price.
Although we do not have specific information about the nature of these transactions - whether they involve hedging, the sale of goods, services, or assets at a specified price - we know that a large volume of transactions occurred at these levels. These levels are often used as TakeProfit or StopLoss points.
Data Publication and Trading Models
Lime and Yellow levels are calculated using the same data sources and algorithms. They differ only in the timing of data publication:
Lime levels are published in the evening (GMT).
Yellow levels are published at night (GMT).
The trading models for these levels are identical. The two main models are:
Reaching the level – Trading based on the scenario where the price moves toward the Lime or Yellow level.
Reaction at the level – Trading based on price reaction after reaching the Lime or Yellow level.
Trading Strategies
Reaction at the level: This model has a higher accuracy rate but generates lower potential profit.
Reaching the level: This model is more profitable but requires more experience, such as trading setups in line with the trend.
Accurately determining the trend direction is key to the profitability of these strategies. One methodology that allows for high-accuracy trend identification is MMD, which you can learn more about on the website: MagicOnCharts.com.
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Flow Zone Levels
Flow Zone (FZ) levels are liquidity flow-based indicators that serve as key support and resistance levels in the currency market. They are calculated using advanced algorithms that analyze high-value transactions and market dynamics. Due to their precision, FZ levels can be used by traders to identify critical moments in the market where price direction changes are likely to occur.
JUMP Levels
JUMP levels are a unique group of DML levels, named after the dynamic "jumps" in price, after which a signal appears indicating an opportunity to take a position.
These levels are characterized by sharp breakouts of several dozen pips up or down, which often signal a change in sentiment among large market participants, such as liquidity providers.