Wednesday, October 17, 2012

In Market Profile - what is a trading day?

Today is a great example of a trading day that will most likely span 2 calendar days.  This type of trading day is the most frustrating, because all our adrenaline that normally serves us well in the high volatility markets will exhaust us if it just keeps dragging on.  A trading day is the space on a price graph that delineates a trading idea or session of interaction between 2 dueling forces (buyers and sellers).  The buyers want the sellers to capitulate...and vice-verse.  Until one of them wins, the market tends to not go anywhere.  While it looked like the sellers won today, until we get clear confirmation of either a "P" up or a "b" down, we can't determine that we are out of a value tethered price region (even if the mode shifts).  We won't know the answer to that question until we get more horizontal price action.

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