Every freely-traded market makes a series of turning points that tend to occur during the day session of the regional stock market.  They can range in number from two to four, but about 80% of the time there are three: HI-LO-HI or LO-HI-LO.  You don’t need to master complex cycle theories or pay to join some elite trading group in order to recognize and utilize daily turning points. I can teach you how to spot them and exploit them with conventional technical analysis.

Scoreboard

ES: 8 wins / 0 losses

Menorting Moment / Chart Chat

Today will be the last M5 sneak preview before my free webinar: “TECHNICAL ANALYSIS: What it is, how it works, and why it is indispensable to good trading” this Wednesday, 9/14/11 @ 9am PDT.

One of the uses of Technical Analysis is to divide the continuous flow of price movement into discreet units for easier evaluation and comparison.  These units can be based on time, volume or volatility.  Most common are the time-based charts where each price bar or candlestick represents 3 minutes or 5 minutes, etc.  “Tick” charts are volume-based.  In this context, “tick” refers to “trade” rather than a market’s minimum price fluctuation.  A tick chart may create a new bar or candle every 150 trades, etc.  Less often used are the volatility or “range” charts where each bar or candle represents a specific amount of price movement such as 2 points/8 ticks.  Here, “tick” does refer to the minimum price fluctuation.  Today’s chart is a 2-point or 8-tick range chart.  With a range chart, there is no need for the ATR or the Bar Timer because each bar is the same range and a new bar begins only when the old bar has completed the range no matter how long it takes.

Today’s range  chart shows a HI-LO-HI-LO pattern skewed a bit toward the later end of the session.  Have a great evening.  Be back tomorrow.

Please click on the chart below to make it  larger.

Today’s ES “Range” Chart