BOM vs TTR

Any sideways TTR is BOM everywhere, including the open, so no issues there.

There is a distinction though on the open.

You want to see a new high and a new low a bit away from the open - Al says the TR should have a height of 20-30% of average daily range - so that the open is somewhere between them. This is the sweet spot and means that the market is probing both directions first to decide which way to BO. You have a higher chance of a successful BO (either direction).

If you directly open with a TTR, where the range is too tight and you have 10+ bars inside, that shows a lack of momentum and that reduces the odds of having a successful BO and a trend. The odds of a TR day increases.

The opposite is also not ideal; if the opening range is too big, then the market might have already exhausted any will to BO in either direction. You know the average range of a day and if you get close that, a reversal has higher probability rather than a BO, so the odds of a TR day increases again.

Great explanation, thank you.

So Example #1 might be better classified as 'Opening Reversal' (some type of wedge or DB)

Example #2 might be gap up, TTR Bull Flag

You can just say that ex #1 is a triangle/TR (same thing) and you have a bull BO.

Ex #2 can be gap up or down, it doesn't matter because you have a bull BO again, but this time from a TTR.

Both examples are BOMs.

If these are happening during the open, ex #1 has more chance of leading to a bull trend (but here it resulted in a trending TR day) because the range is bigger. #2 is very tight and has lots of tails and dojis, which reduce the probability of a trend day. As you can see, the market tried to reverse around the MM target but buyers came in and the day turned into a trend day. It could have easily gone sideways there (the big bear reversal bar above the stop line), but it didn't.

Thank you--

Regarding BOM Open, do you know what the importance of new high + new low is?

Comparison>

• BOM Open, 10+ Bars, Range = 20-30% ARD, New High AND New Low
• BOM Open, 10+ Bars, Range = 20-30% ARD, New High OR New Low (but not both)

Maybe it shows more equality and means there will be trapped traders fueling the breakout?

When you are making only new high(s) that means you are also making new higher low(s) going bar by bar that are hallmarks of a Bull Trend and vice versa on a micro level perspective.

If you don't have a H and a new L, then you can have

1. a bull or bear channel, which is a trend like Hubert said and that is a trend from the open, not a BOM open,
2. an expanding triangle, where the top or the bottom is around the same level but the other side is expanding. Since that is also a TR and therefore BOM, the market still has a BOM open,
3. a contracting triangle (a wedge). This is probably a reversal setup rather than BOM, meaning BO from one side has more probability, instead of both sides having around 50% chance.

So is this about right?

• BOM Open (New H + New L) is showing neutrality, so it's more 50/50
•  Anything else is still BOM, but it slightly favors the prior direction

Postado por: w

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So is this about right?

• BOM Open (New H + New L) is showing neutrality, so it's more 50/50

Postado por: w

↑

Anything else is still BOM, but it slightly favors the prior direction

Nope.

You are making things complicated. Here's the gist of all this: For an open to be BOM, market needs to open directly sideways and probe up and down to BO in one direction. If the sideways move, the TR, is too tight or to too wide, then you don't expect a BO in either direction. That's it. If you see other patterns on the open, they imply different things; they can either be reversal setups or continuation setups.

For example, the bottom right (bullish) pattern that looks like an F is actually a small bull trend on the open and then a flag, so it is not a BOM. You already have a small trend and you likely expect the bull trend to continue (or reverse, if you get a credible top).

Same goes for all your other illustrations; they imply different things.

There are 4 broad open categories:

1. Direct trend from the open (all your illustrations on the right are these)
2. BOM (TR) open (only the leftmost illustration and what we are talking about)
3. PB on the open and then resumption of the previous trend
4. A direct reversal into opposite trend

I think this explains everything, thank you.

Summarizing with the following slides:

All Opens can be categorized into the following 3 categories:

• Trend from the Open (20% of days)
• BOM Open (25% of days)
• Opening Reversals (80% of days)
  • • Pullback / Flag (80% odds)
    • MTR (50% odds)

Does this open pattern applies with the Global Data on the left at the open?  Since in my country TV does not yet able to hide the Global Data.  Thanks.