To understand the market perfectly yesterday's Market Profile is very important, especially if you are a day trader, it gives a referral point..here is the list of to do list to prepare for next day market open, as said in first post there are no shortcuts to understand the principal -how market behaves -in contextualize way.
1>Review yesterday’s profile for clues as to what to expect today. Make
a note of possible trades, based on varying developments.
2> Review the overnight markets for any unusual price movement or
early indications for the day.
3> Compare the expected opening to the previous day. Is it within or outside
the previous day’s range? Value area? To the upside or downside?
4> Relative to the expected opening, identify three references points,
both above and below the expected opening. These could be the
previous day’s high and low, weekly high or low, the top and bottom
of the previous day’s value area, or the high or low of a recent trading
range. (There is no set answer—you should be guided by your past observations
of where price slowed or accelerated, as well as past areas
of heavy or light volume.)
5> Note what kind of opening is occurring, as well as what you’d want to
see in order to quickly judge the resulting directional confidence.
6> Note whether or not there is clear attempted direction, and whether
that activity is supported by volume.
7> Does the market appear to be within balance or out of balance?
8> Visualize the remainder of the day. Will it look elongated, squat, fairly
normal like a bell-shaped curve, and the like. Note any unusual shapes
or patterns that may suggest something unexpected is happening.
9> Estimate how much effort is being expended to move price directionally,
and note what that suggests about the inventory conditions of
your competitors—too long, too short, above water, below water, etc.
10> If there is a major news announcement scheduled, be aware that there
could be unexpected volatility. Let the market provide short-term interpretation
of resulting activity by observing developing structure.
Unless the day-timeframe structure is extremely strong and unlikely
to be reversed by such an announcement, we recommend that day
traders be flat in front of significant numbers.
1>Review yesterday’s profile for clues as to what to expect today. Make
a note of possible trades, based on varying developments.
2> Review the overnight markets for any unusual price movement or
early indications for the day.
3> Compare the expected opening to the previous day. Is it within or outside
the previous day’s range? Value area? To the upside or downside?
4> Relative to the expected opening, identify three references points,
both above and below the expected opening. These could be the
previous day’s high and low, weekly high or low, the top and bottom
of the previous day’s value area, or the high or low of a recent trading
range. (There is no set answer—you should be guided by your past observations
of where price slowed or accelerated, as well as past areas
of heavy or light volume.)
5> Note what kind of opening is occurring, as well as what you’d want to
see in order to quickly judge the resulting directional confidence.
6> Note whether or not there is clear attempted direction, and whether
that activity is supported by volume.
7> Does the market appear to be within balance or out of balance?
8> Visualize the remainder of the day. Will it look elongated, squat, fairly
normal like a bell-shaped curve, and the like. Note any unusual shapes
or patterns that may suggest something unexpected is happening.
9> Estimate how much effort is being expended to move price directionally,
and note what that suggests about the inventory conditions of
your competitors—too long, too short, above water, below water, etc.
10> If there is a major news announcement scheduled, be aware that there
could be unexpected volatility. Let the market provide short-term interpretation
of resulting activity by observing developing structure.
Unless the day-timeframe structure is extremely strong and unlikely
to be reversed by such an announcement, we recommend that day
traders be flat in front of significant numbers.
