What are some of the techniques that you use to identify what kind of day you believe it is going to be. Im talking in terms of will it be a mostly choppy/range bound day, or will it be a trending day.
Obviously there's no method that will always be correct, but what are some of the things you look for in the first hour or so of the day to give you an idea of what kind of day it is going to be.
One of the techniques im aware of (which I haven't used or tested), is to determine the high/low range for the 1st hour or so and make assumptions based on that eg: opening range breakout.
Why do you need to identify what kind of day you believe it is going to be ahead of time? If you trade areas of demand and supply then all you need to care about is to not initiate a trade while price is in the middle.
The following user says Thank You to trendisyourfriend for this post:
1. Tick levels
2. Strength of advance/decline line
3. What was character of previous day(s) trading range
i.e., small range vs large range
4. On a daily chart where is price relative to a trading band such as
a keltner channel or bollinger band
5. How deep are the pullbacks and how do indicators act during a
I think if you are overly concerned with chop, you are trading too small of a chart. You should trade bigger time frames (my smallest is 60 min), and then just reduce risk $$ by trading micro currencies with CME FX, spot forex, or ETF's.
I can't really remember the last time I was concerned about chop or range bound days. Well actually, yes I can. It was when I used to trade a small 6 range chart.
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The following user says Thank You to Big Mike for this post:
- average volume - cumulative volume for the time of day - average cumulative volume for past 60 days. Not so much the actual number but whether we are moving up - more than average volume coming in or moving down.
- shift in cumulative delta - look @ yesterday AM, 4k up, 4k down on the ES - nothing at all, then later it picked up and we saw a delta shift up