Day Trading Different Types of Trading Days

Day Trading: Different Types of Trading Days:-

  • Normal Day
  • Trend Day
  • Non-Trend Day
  • P-Shape
  • B-Shape
  • Neutral Day
  • Inside Day
  • Outside Day

Types of Day –Normal Day

  • A normal day occurs when the market moves with conviction in one direction at the market open, usually due to news being released.
  • After the move, the market loses conviction and moves mostly sideways or retraces back slightly for the rest of the day.
  • Basically, the major players step in and do their trading early and fast.
  • The characteristics of Normal days are:

1. A wise initial balance range

2. Both the IB high and IB low are not broken

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Types of Day – Trend day

  • A trend day usually occurs when the market perceives a major change in value. As a result, the market immediately starts moving in a direction and continues in that direction for the rest of the day with only minor pullbacks.
  • The market closes at or close to the extreme of the direction it was moving in.
  • The Characteristics of a trend day are:
  • A wide day range
  • Little to no counter-trend
  • Closes at the day’s range extreme(within 25% of the day’s range)

Types of Day – Non-Trend Day

  • A Non-trend day is a directionless day. The day starts off sluggish with a narrow IB and the rest of the day is more of the same, with neither the IB high or the IB low being broken (Or at least, broken only very slightly).
  • This is the type of day you find on holidays, or days when the market is waiting for news or some event.
  • The characteristics of a Non-trend day are:
  • A narrow initial balance
  • Both the IB high and IB low are not broken
  • A narrow day range

Types of Day – Double Distribution Day

  • A double distribution trend day is a fairly uncommon day type. It consists of a day that starts off sideways, forming a narrow initial balance. However, traders enter the market aggressively and drive the market in one direction with little to no counter trading.
  • The market then continues sideways once it reaches what it considers valuable. So there are 2 sideways movements that day, one at lower and other at the upper end.
  • Such days often lead to a rotational movement on the next day to trade between this 2 sideways range. Once this is completed then market usually starts s trending move.
  • The characteristics of a double distribution trend day are:
  • A narrow initial balance
  • A wide day range
  • Classes at the day’s range extreme (within 25% of the day’s range)

Types of Day – Neutral Day

  • A Neutral day occurs when both sellers and buyers are very active. As both sellers and buyers are very active, you get strong moves both up and down, breaking both the IB high and the IB low. Usually, the market closes in the middle of the range.
  • The characteristics of a neutral day are:
  • A normal initial balance range
  • Both the IB high and IB low are broken
  • The market closes in the middle of the range (within the IB)

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