[Frank]

Let me provide some data to support what I am saying.

I took all full trading days since November 2007 and divided the market into two buckets: 1) if price made its low or high for the day (low if low first, high if high first) in first 90 minutes of trading or 2) high or low made in any other time period past the opening 90 minutes. Note that there are usually 20-22 trading days per month so I am trying to show that the Taylor Cycle 'should' kick in during those first 3 bars about 75%+ of the time. In March, it was 19/22 (higher than normal).

personally, I find these statistics to be quite powerful for more than just their face value. for example, if you know that the first 30-minutes often makes the low for the day, many times you can go long during that timeframe and get a nice trade on -- and price will end up reversing later on and the first 30-minutes won't be the low for the day -- but you made money on your trade anyway simply because there was enough buy-pressure to create a squeeze for those fearing that it 'could' be the low of the day.

[monad]

Great insight Frank,
BTW do you keep a book as per Taylor on the instruments that you trade. ie. avg. decline, avg. penetration, avg rally etc.
Presume your primary focus is on ESmini, if so what cycle are you on, I mean what is today as per your count, a Buy, Sell or SS day or you term them Day 1, Day 2 and Day 3 respectively.

[Frank]

the taylor day count is just a subset to how I think about it.... I may lean that way should it fit my overall concepts or I may not.

I prefer the framework of the market profile 'auction' --- as in, an auction CAN end when there is a high or low violation --- and I may look for that --- but the auction can also continue until a 'morning low or high' is violated.

so today, we came in after low made first on Thursday. therefore, the 'auction' is up -- until a good morning low is taken out.

But the market made its low during first 30-minutes today -- consistent with the statistics saying where it should. therefore, no matter what the day Taylor called it, I am not going to short and will try to find a spot to go long.

[mitsubishi]

I had today as a buy day and since the trend is up until it isn't the early low was a gift.The GS bullshit tells me,amongst other things,that this is a pump and dump rally built on thin air,but our job is to make money regardless of how illogical the market appears.

[monad]

Originally Posted by Frank »

the taylor day count is just a subset to how I think about it.... I may lean that way should it fit my overall concepts or I may not.

I prefer the framework of the market profile 'auction' --- as in, an auction CAN end when there is a high or low violation --- and I may look for that --- but the auction can also continue until a 'morning low or high' is violated.

so today, we came in after low made first on Thursday. therefore, the 'auction' is up -- until a good morning low is taken out.

But the market made its low during first 30-minutes today -- consistent with the statistics saying where it should. therefore, no matter what the day Taylor called it, I am not going to short and will try to find a spot to go long.

I can see that this is a great way to blend Market Profile with Taylor.

1. Hence I take it you do not keep a book.
2. How would you now set out strategies and tactics for today without calling today as a sell or ss day etc.
Say market opened up low ie. with a gap down but still above yesterday's low, what would you be looking to do, then say once it gets above yesterdays high, again what is the strategy.

3. OTOH, if it opened low and kept going south what is the plan of action.

4. Obviously if it opened high above yesterdays high, you will be looking to short.

[Frank]

The way I think about it is that my statistical tendencies and market profile concepts are 'my book'. Taylors book calculations allowed him freedom to go long on sell days and short buy days etc... so to Taylor, its the calculations that matter much more than the label of the day.

----

right, if price opened high today, would be a traditional ss-day --- with a penetration of the previous high or a test of the previous high (failure to penetrate) marking the location for a good short.

if the move instead happens overnight then the location is no longer favorable and have to re-think using the concepts:

1. Inside days are rare -- so market will very likely take out either Mondays High or Mondays Low at some point today. This offers a directional target to shoot for.

2. 3 low-first days in a row argue for a 'high-first' day --- so one bias would be for price to take out any morning low it forms by the end of the day --- which would then trigger a reversal in the market profile auction from up to down. you can anticipate this if you find a pattern that makes sense.

3. If the high of the first 3 30-minutes is penetrated, then the statistical odds then favor are on the side of low first.

4. If the high is not made in first 30 minutes -- then odds drop that you will close really far away from previous days close.

5. Once the morning high or low is set, you can do high-odds range calculations for a high-odds price target.

[Frank]

so idea is that if you know that most of the time market is going to make a key high or low in first ~3 bars - figure out if the high or low is being made first and find a trade that is consistent with that intraday move.

today, the market traded up FIRST for its key high and then went directionally to take out the morning low and previous day low.

so you usually have 2-3 pivots to think about -- the previous days close and the previous days high and low. the market does 'usually' like to trade towards the previous days close for a few bars at some point... so if it does this, don't be fooled that it has chosen its direction for the day -- this is normal action.

so its like a puzzle every day. the last 2 days (prior to today), the correction that lasted a few bars towards the previous close still wasn't enough to take out the opening 30-min bar low and did not really threaten the previous days low --- when that happens the previous days high (or the morning high) now becomes a directional pivot for the remainder of the days direction. today, the market corrected towards the previous days close (at 854) but never really threatened to take out the previous days high... thus, the previous days low became a target --- which lined up because we were due to take out the morning low after so many consecutive days of NOT taking out the morning low (3 straight low made first's -- where a morning high is set and then subsequently taken out -- today the opening 3-bar high was set and never again violated)

[monad]

Frank,
Would you say yesterday 15th April, the market opened low, traded towards the close of the previous day, and then took out the morning High later in the session.

OTOH today the market has opened higher as the high was made Last yesterday, and then traded towards yesterdays close. Infact this would be a classic Buy Day short on a High made Last on SS day as per Taylor