Red levels are weekly support and resistance levels that appear on the chart on Wednesday afternoons (GMT) and remain valid until midnight from the following Tuesday to Wednesday (GMT). They consist of six horizontal lines: three above the price and three below. The main Red levels, known as RedEx, are located at the extreme positions – both at the bottom and top. Approximately one-quarter of the distance between the lower and upper RedEx levels, the Red levels create a zone marked by two bold lines, both above and below the price.

Characteristics of Red Levels

Red levels, part of the DML levels, are determined once a week on Wednesday afternoons (GMT) and remain valid until midnight from the following Tuesday to Wednesday (GMT). These levels act as strong supports and resistances, significantly influencing price movements in the market.

Trading Models for Red Levels

Red as Support

Red levels that act as support are crucial for maintaining the price above a certain level throughout the week. Traders can use these levels to open long positions (BUY) when the price approaches Red support, expecting a rebound and price increase.

Red as Resistance

Red levels that act as resistance serve as important points where the price may struggle to rise further. Traders can use these levels to open short positions (SELL) when the price approaches Red resistance, expecting a rebound and price decline.

Consolidation at Red Levels

At Red levels – those zones closer to the price – we typically use three transaction models:

• Price reaction at the Red level and direction change: A strategy involving observing the price approaching the Red level and expecting a rebound.
• Consolidation at the Red level: The price oscillates within the zone marked by two bold lines, creating an opportunity to play positions in a short range.
• Breakthrough of the Red zone and return: After breaking through the Red zone, the price often reaches the RedEx level and then returns to the Red level.

Magenta Levels

Magenta levels are three dashed lines determined in the same way as Red levels. Magenta levels divide the space between the Red levels into four equal quarters. The price often reacts to the Magenta levels, making them an important element in analysis and trading strategies.

Additional Tips

Magenta levels are often reached by the price after the period separator appears at the close of the Wednesday trading day. This is a key moment that traders should consider in their strategies, as price reactions to the Magenta level can provide valuable insights into future price movements.

Summary

Red and Magenta levels, as integral parts of models related to DML levels, offer unique opportunities for identifying key turning points and managing risk. Their application in trading can significantly enhance investment efficiency, providing precise tools for analyzing and predicting market movements.

Educational Page and Social Media

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