- In my opinion there are 3 main types of trading days.
- A good question I’ve been asked is how can one asses what type of trading day we will have while the market is still trading….I have been doing some work in finding the answers and will be happy to hear feedback via email but here are some initial observations:
- Was the overnight session a wide, two sided trading range? If the answer is yes, good chances for similar trading day during the primary session (primary session is when the cash/stock market is open)
- Mondays have the highest chance for trending days
- The behavior of the first hour of trading can also suggests the type of action for the rest of the day.
- If the first 30 minutes of the trading day have good volume, better chances for type 1 or type 2 trading days.
- Low volume during the first 30 minutes can suggest a choppy (type 3 trading day)
- Are there other strong trends in other sectors? ( bonds? metals? energies? Dollar index? )
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