Predicting Price Movements in Trading Using Highs and Lows

2023년 11월 4일

Have you ever wondered if you could predict price movements in the stock market with a simple strategy? Let's explore a trading approach that involves analyzing the previous day's high and Monday's range high to anticipate potential price shifts.

In trading, various techniques are employed to forecast price movements, and one such method is based on specific rules, sequences, and deviations in the market. By examining the previous day's high and the high of the week's opening day (Monday), traders aim to make educated predictions about where the price might go.

How it works:

Previous Day's High: Start by identifying the high price of the previous trading day. This can serve as a reference point for potential resistance levels.

Monday's Range High: The high of the week's opening day (Monday) is significant. It sets the tone for the week and can act as a potential price target.

Price Movement: Based on rule and sequence analysis, traders often speculate that the price will visit the lows of either the previous day or the low of the week's opening day (Monday).

This strategy relies on the idea that the market tends to revisit certain price levels over time. It's essential to consider other factors and use risk management techniques in conjunction with this analysis to make informed trading decisions.

While this approach is not foolproof and should be used in conjunction with other technical and fundamental analysis, it's an interesting concept for traders to explore.

Remember, trading involves risks, and it's essential to thoroughly understand any strategy before implementing it in your trading activities.