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Hi there,
Al talks about how market on the Open is likelier to reverse even strong BOs... so probabilities are closer to 50% even for High Probability setups.
At what point do probabilities for e.g. a Strong BO normalise back to 60%+?
Does this happen during the Open session (and is there a signal for this) or do we need to "Look for Change" i.e. wait for the Middle session for these probabilities to be normalised (and therefore the entire Open session has probabilities closer to 50% for all setups)?
Thanks
Noah
Bump
Hi,
a closer look at previous days PA the H L and C as well as GXH and GXL should help you with that as most of the time the probabilities are context-dependent and some patterns are spread over two days due to the session break. The open works like a reset as well, as there might have been some factors outside the market hours which might lead the market participants to change their market view and therefor to take action at the open of the next session like the FOMC events and the day after it.
Brad often includes a disclaimer in the daily blog:
The open will probably have a lot of trading range price action. This means that most traders should use caution and consider waiting for 6-12 bars unless they are able to make quick decisions.
I tend to use his 12 bars as a reference point for lack of anything better. I'd be curious to know how he came to that number?
On a related note: He also mentions that if the 8:30 Globex bar is a news bar that prints a large Doji, the RTH open is essentially in BOM of that bar. I only mention that because in most cases BPA seems to discount Globex price action.
I only mention that because in most cases BPA seems to discount Globex price action.
This should be due to the traded volume. Just take a look when there is no news event and which volume the M5 bars on GX (ETH) compared to RTH bars have. There is a huge difference what might be the reason for his statement.
Thanks for this, I guess it's down to:
1. If we open with a TTR, it means market is agreed on price. Bars will overlap, reverse prior bars, have tails... so it's BOM and 50:50
2. If we open with a Gap and/or a BO, then market isn't agreed on price, and 50% of Opening BOs will reverse as market searches for fair price... and this might include BO / Failed BO of Yesterday's H/Ls.
?
