Since I get so many questions about Ludwig Levels, I’ve made this page to answer the most common questions.
Ludwig Levels are a creation by Pam Ludwig and are proprietary. However, rumor is that they are based on Option volume. Find out more on her site – http://www.ludwiglevels.com/ Normally it’s four symbols for $125 a month. There is a deal for $85/month that gives you NQ & MNQ only http://www.ludwiglevels.com/401/login.php?redirect=/special.html Password: MiamiMax
Ludwig Color Levels
- Red – UP Level – Major Resistance – I exit all long trades at the UP Level. If Market is in rotation, then I look for counter move off of this level. If Market is in a Trend Day, then I still exit all long trades at this level. I look for the Market to show if it is going to pull back – looking for re-entry point or to Move through the Major Resistance and create a new set of Ludwig Levels.
- Magenta – UP Minor – Strong Resistance – Usually close to UP Level to form a zone. When UP Minor is stacked on top and equal to UP then that increases the strength of the resistance.
- Orange – Target Level – A target level on a long trade usually coming from the
Direction Level going up towards the Target Level. This is a partial exit for multiple contracts. Again, it is important to know if market is in rotation or
trending and the larger degree trend. - Yellow – Direction Level – A balance point for the Levels.
- Green – Target Level – A target level for a short trade usually coming from the Direction Level going down towards the Target Level. This is a partial exit area for multiple contracts. Know if the market is in rotation or trending.
- Cyan – DN Minor Level – Strong Support – Usually close to DN Level to form a support zone. When DN Minor is stacked on top and equal to DN, then that increases the strength of the support.
- Blue – DN Level – Major Support – I exit all short trades at the DN Level.
If the Market is in rotation, then I look for a counter move off of this Level. If Market is in a Trend Day, I still exit all at this Level. I then look for the market to pull back for a re-entry point in the direction of the Trend. I look at other market components to determine if the Market will move through the Major Support and create a new set of Ludwig Levels. The best use of Ludwig Levels is knowing if the market is in rotation or in a Trend Day and use trading techniques that support the Market Conditions.