The hAnDbOOk Of TeChnICAl AnAlysIs- The normal variation day
- The trend day
- The neutral day
Some variations exist. The trend day may be one with a single or double distribu-
tion and the neutral day may be a mid‐range close or end‐range close neutral days.
the non‐trend Day
All trading activity remains within the initial balance on a non‐trend day. The
initial balance is also fairly narrow when compared to the other four daily profile
formations. The longer‐term participants have no interest or find no opportunity
within the day’s activity. Trading is populated by the shorter‐term participants,
looking for a fair price. Possible reasons for all trading activity remaining within
such a narrow range include:
■ (^) Waiting for important or significant economic releases, central bank policy,
interest rate announcements, company earnings announcements, and so on
■ (^) No real announcements to move the market
Trading opportunities include selling at the top and buying at the bottom of
the initial balance range. See Figure 17.19.
the normal Day
All trading activity remains mostly within the initial balance on a normal day. It
differs from the non‐trend day in that its initial balance is relatively wider. Note
that there is some discrepancy here among various authors with respect to the
violation of the initial balance on a normal day. According to Steven Hawkins, in
Steidlmayer on Markets, the day’s trading activity “produces a directionally biased
range extension of about 50 percent beyond the first hour’s range.” Alternatively,
figure 17.19 A Non‐Trend Day.