Friday, February 10, 2012
Narrow range days distort your perception
One of the hard things about trading a narrow range day is that it distorts your perception. For example, b37 was a possible BP trade with b29 being a possible BO above HOD. If the range was wider, it would be fairly obvious to trade only shorts near the upper part of the range and b37 would be a poor decision. Similarly, the second fBO at b43 may have broken into a trend and b66 is a possible A2 but if the range was wider, it would be obvious that b50-65 was a horizontal flag and a possible FF.
Tiny bars, shallow pullbacks, poor signal bars distort your perception and force many incorrect reads of patterns and signals and the narrowness of the range reduce profit potential and probability of every trade.