Freak opening/high prices - one observation to share

bunny

Well-Known Member
#1
Guys, I have many times come across "freak" prices, such as freak open price where the high price is equal to the open price. If we see the chart, we may not be able to see that highest price tick.

I have observed that such freak prices are mostly across trading ranges or high pivots, means there is an un-broken trading range or high pivot to the left of that bar. My approach of analyzing the market is Volume Spread Analysis(VSA) and in that, such an supposedly "freak action" may be an failed attempt to gap up(pushing up through supply). This freak high/open is mostly never at the level of previous pivot high or trading range, but mostly above it.

I am attaching two charts to support my view. [Chart 1] [Chart 2]. I have not backtested this observation too see its consistency.

Also, I think its a widely misbelief that "Amateurs decide the opening price". I think this has been said by some famous trader, and even Ashwani Gujral has quoted those lines in one of his book.

Please comment.
 

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