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I understand Al doesn’t trade markets such as Oil CFDs and Cryptocurrencies that trade 23-24 hours a day, but what would be your understanding of how this 18 bar rule could be applied to those markets? I have done some back testing of 24 hour markets and I am still able to see 18th bar as the breakout measured move target although the market has 288 5 minute bars for its daily bar.
Any comment would be appreciated
Al answers this question in upcoming 48E & 48F series videos I believe. Here’s a quote from Al on topic, as Al has answered this several times in different places:
“There is nothing magical about 18 bars. I could have picked 16 or 23. The idea is that if the market has been in a range for about 20 bars and it breaks out, there is only a 20% chance that there will be a breakout of the opposite side of the range by the end of the day. Also, if the range is about half of the average recent daily ranges, traders will look for the day’s range to approximately double.”
