Terms preceding day trend

Terms preceding day trend

Several key price patterns can serve as notification of the potential for significant expansion:
• NR7 - narrowest range of the last 7 days (Toby Crabel introduced this concept in his classic book, day trading with short-term Price Patterns and Opening Range Breakout);
• a cluster of 2 or 3 small daily ranges;
• point of the wedge-type model (which usually manifests itself contracting daily moves);
• House Day (which is open above / below the previous day's high / low price and then changed direction, range, must also be narrower range than the previous day, leading traders to believe that the trend reversal occurred, and the market, instead of having only formed a small consolidation or extension intraday chart);
• Low volatility readings, based on such statistical measures as standard deviation or historical volatility ratios or indices;
• opening of large gaps (caused by a large imbalance between buyers and sellers);
• flight impulse (markets with no resistance above uptrend or any support below the downtrend. This situation differs from the above setting in volatility that have already been expanded. At one point in the market, however, the huge imbalance between buyers and sellers continues to expand the trading band!)