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Can I ask a couple of questions that maybe can kick-start the thread again.
Why is the first hour of trading considered so important (the initial balance)? Why is it the first hour? Has anyone come up with ideas for what characterisitics might define an 'initial balance' better?
I hope we can resuscitate this thread! |
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Hi Mister Ed, I'm no expert in MP and I'm not saying I'm right but here's how I look at initial balance. To me it's range and activity gives a good indication of sentiment. A wide range shows a lot of activity and a lot of 'steam' being used up within the first hour. So a future break out of this range is less likely since a lot of energy has already been used up. A narrow range shows a bit of consolidating and 'steam' being built up for a push later on out of that range.
Why the first hour? Well, I know some people that just use the first half hour. Those that can move the market are able to conduct their large size transactions within the volatility at this time of the day. What position they are taking around this time will most likely set the direction or action for the day. This is just how I view it.