Why Keeping track of Opening Ranges Is Important...
First glance at the chart below would be confusing would it? Unless you knew why all those lines were there.
What those lines are are opening range markings where past and present market maker areas are defined. You will note that the entire move from last night was defined within these lines. From the 2419 area of the SP I knew that the market had a strong probability of moving up from there. It did exactly that.
You can say sure that is one of the Fib areas or whatever else you want. You'd be wrong. This constitutes volume and volume of order execution is what moves the market back and forth. When most people look at volume they see it as a hard stop area which is flatly wrong. I have proven this to you in the past when I showed you that volume areas can be hundreds of ticks or pips wide depending on the time frame you are looking at. If you use hard stops chances are the volatility will chop you out. No it is not some secret power coming after you but rather you simply got caught in the bear bull fight taking place at a much higher level. In short your stop is too tight.
It is the same reason I knew to go short at 46.65 in oil today. It is a very powerful volume area from precious price action. If price was going to fail it would be here. If it continued well it simply means you were wrong. Period.
I keep track of all opening ranges on the markets I trade. I do this because they change all the time. However it gives me an idea of where the market is likely headed and where it might stall. Not because of imaginary scenarios but rather because I know this is the area where the larger players will fight it out where I cannot see their orders.
So do yourself a favor and watch your trading get better and better knowing where these areas are.
What those lines are are opening range markings where past and present market maker areas are defined. You will note that the entire move from last night was defined within these lines. From the 2419 area of the SP I knew that the market had a strong probability of moving up from there. It did exactly that.
You can say sure that is one of the Fib areas or whatever else you want. You'd be wrong. This constitutes volume and volume of order execution is what moves the market back and forth. When most people look at volume they see it as a hard stop area which is flatly wrong. I have proven this to you in the past when I showed you that volume areas can be hundreds of ticks or pips wide depending on the time frame you are looking at. If you use hard stops chances are the volatility will chop you out. No it is not some secret power coming after you but rather you simply got caught in the bear bull fight taking place at a much higher level. In short your stop is too tight.
It is the same reason I knew to go short at 46.65 in oil today. It is a very powerful volume area from precious price action. If price was going to fail it would be here. If it continued well it simply means you were wrong. Period.
I keep track of all opening ranges on the markets I trade. I do this because they change all the time. However it gives me an idea of where the market is likely headed and where it might stall. Not because of imaginary scenarios but rather because I know this is the area where the larger players will fight it out where I cannot see their orders.
So do yourself a favor and watch your trading get better and better knowing where these areas are.
No comments:
Post a Comment