I have been going over average movements for awhile now and this is just a snippet of the last month. I have noticed there are four main movements.
Small movements of 250 ticks, used in small pullbacks and retracements
Medium movements of 375 ticks, used in slightly deeper pullbacks and retracements
Large movements of 625 ticks, used in expansion moves, either to the upside or to the downside
X-Large movements of 750 ticks, used in more substantial moves, either to the upside or to the downside
Out of the four, small 250 moves and Large 625 tick moves are the most frequent.
One of the ways I am using this information is where to take profits. I know I won't catch the bottom or the top of the move and so, if I can capture the middle 50% then I can use these average movements and cut them in half. If a large expansion move is on average 625 ticks, then 50% of this will be 312 ticks. Therefore, I could expect a pause or pullback at/ around that area.
Small movements of 250 ticks, used in small pullbacks and retracements
Medium movements of 375 ticks, used in slightly deeper pullbacks and retracements
Large movements of 625 ticks, used in expansion moves, either to the upside or to the downside
X-Large movements of 750 ticks, used in more substantial moves, either to the upside or to the downside
Out of the four, small 250 moves and Large 625 tick moves are the most frequent.
One of the ways I am using this information is where to take profits. I know I won't catch the bottom or the top of the move and so, if I can capture the middle 50% then I can use these average movements and cut them in half. If a large expansion move is on average 625 ticks, then 50% of this will be 312 ticks. Therefore, I could expect a pause or pullback at/ around that area.
Note
Using price in increments of 250 ticks inside of each 1000 tick box, one can find support and resistance levels a little better. If price is bouncing off a 500 level and an expansion move is around 625-750 ticks, then a good area would be the next 250 level above.Note
Intraday trading, this gives you an idea of a typical movement in a particular direction. This is one of the reasons I use 50 ticks stops and around 110-125 tick targets while intraday trading. I know that if a typical move is about 150-200 ticks and I know I won't reliably catch the exact bottom, then if the market moves 50 ticks against me, I know most likely I am wrong and I need to get out and try again.Note
Using my two trades I took on my Topstep account for intraday trading, I bought what I believed was the low and was quickly wrong. I took my L and saw another chance to go Long again. I use the same 50 ticks stop and this time, the low holds. I recovered my L and walked away on the day with 1.5%
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.