Once again here let me explain the highlights and key points.

As we can see
the pair
has been rising, but the market moves lower as shown by a wide spread down
candle.
This is followed by a narrow spread down candle with above average
volume, and
signalling possible buying on this reversal lower. The market pushes higher
on the
next candle, a wide spread up bar, and posts a pivot low as shown with the
small
yellow arrow. We are now looking for a possible pivot high which will start
to
define a potential period of congestion.
This duly arrives two bars later, and the pivot high is now in place. Now we
are
watching for a potential congestion phase, and further pivots to define the
trading
range. However, on this occasion, the next candle breaks higher and moves
firmly
away from this area. The potential congestion phase we were expecting has
not
materialised, so we know this was simply a minor pause in the trend higher,
as knd
co the pair move up on good volume.
Two candles later, another pivot high is formed, and once again we are now
looking
for our pivot low to form and define our levels of any congestion phase. In
this
example the pair do indeed move into congestion, with low volume, and on
each
rally a pivot high is posted which gives us a nicely defined ceiling. However,
there
are no pivots defining the floor. Does this matter?
And this is the reason I wanted to highlight this example to make the point,
that in
fact it doesn't.
A pivot is a unique combination of three candles which then create the pivot,
and
this helps to define the region for us visually. Pivots also help to give us our
'roadmap' signals of where we are in the price journey. But, sometimes one or
other
does not arrive, and we have to rely on our eyes to define these levels. After
all, a
pivot is simply an indicator to make it easier for us to see these signals. In
this case
the pivot high forms, but there is no corresponding pivot low, so we are
looking for a
'floor' to form.