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Al says that 80% of BO on the open has a minor reversal, and 50% have a major reversal (video 48a slide7). So my question is: is this 80% and 50% applicable just for when the market opens breaking out (tend from the open), or you can use these values when there is a BO mode pattern on the open (BOM on the open, failed BO of yesterday’s H or L, opening reversals….) and eventually the market breakout? Thank you!
I would say it is very similar with BOM, where 50% of the time the first BO fails, so this is the same, and most of the time you get a BO test (minor reversal), it could be 80% or more because a TR open is a strong magnet so sooner or later it gets tested.
Failed BO of yesterday’s H or L are indeed opening reversals and many times they are not BOM, so they would belong either to the market opens breaking out with the 80%/50%, or to the above case BOM, which in any case are very similar.
The best thing to study those situations is to go to the encyclopedia and check the many charts with those openings. Everything is there!
Thanks!! Could I please ask another question?
Al explains (video 48a, slide 13) about the initial rally if greater or smaller than 50% of the average daily range, and in another video he talks about the size of the BOM relative to the average daily range.
My questions is: on how many days before, more a less, do I base myself to calculate this average? Initially I thought on calculating the average of the last 3 day, but I don’t know if there is some rule, or something like that.
Thank you!!
No rule, I just go 2-3 days back.
Thanks!
