Question

FA L S E SU P P O R T A N D RES I ST A N C E LE V EL S Consolidation zones are created during the cycle to create support and resistance levels which become visible on the charts and are used by traders to make decisions. These levels can then be predictably used by the market maker to plan strategy. With this understanding you can buy or sell stop hunts against the herd and in line with the market maker moves. Simply buy the Level III corrections and sell 3rd level rises.

Answer 1

Consolidation zones in trading can create support and resistance levels, which are used by traders to make decisions. However, the statement about market makers using these levels to plan strategy and using stop hunts against the herd is not factual.

Step-by-step explanation:

The subject of this question is Business. The student is asking about false support and resistance levels in trading. In trading, consolidation zones are areas on a chart where the price of an asset consolidates or remains range-bound. These consolidation zones can create support and resistance levels, which are used by traders to make decisions.

However, the statement about market makers using these levels to plan strategy and using stop hunts against the herd is not factual. Market makers are financial institutions or individuals who provide liquidity to the market, and their actions are not based on support and resistance levels. It is important to rely on accurate information and strategies in trading rather than following false claims.