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%TREND Calculations
%TREND: Absolute value of (CLOSE - OPEN) / RANGE
This calculation tells us whether or not the trading day was a trend day or nontrend day. It the close was at the upper or lower range, we will get %TREND reading close to 100%. If market direction was relatively unchanged and the markets closed near the open, we will get a %TREND reading closer to 0%. A high %TREND informs us of market imbalance. The markets usually take breather and will consolidate after a high %TREND day.
Therefore, the %TREND helps us anticipate what type of day we are likely to have.
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James Lee
TradersLaboratory.com
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