I was hit with either a stomach virus or maybe the flu yesterday. I cannot tell which but hopefully it was just a stomach virus. I’m feeling much better but still have a low grade fever so that’s why I’m suspecting maybe I caught the flu. Anyways I spent much of yesterday in bed and did not trade.
In reviewing yesterday’s chart, it was obviously a range bound day (hindsight makes analyzing charts so much easier.) 🙂 I marked the chart with 3 areas which I thought I would comment on.
Area A – This is the first group of potential trade setups for the day. The problem is that I cannot determine the trend. If you look at the white price bars, there is a HH, then LL, then LH, then HL all within the span of about 30 minutes. That’s just too messy for me to declare a trend. The trade setups for this methodology are not valid if there is no trend.
Area B – The YM made a LL and then a HH before pulling back into the 13653 daily SR. Once again, what trend is there? Whenever you suspect you are in a range bounded day, it’s not usually a good idea to take trade in the middle of a range. On range bounded days, you generally want to trade at the edges of the range.
Area C – There is still no trend. What makes this area interesting is that 1) it’s at a double bottom and 2) it’s at the edge of the day’s range. So while this does not make a good trade setup for the methodology, it’s actually a decent setup for trading the range. I would have probably targeted the previous swing high at 13672 as the second target.