Sep 262013
 

Every trading session puts in a high for the day (HOD) and a low for the day (LOD).  Over 60% of the time (and I wish I had a recent stat but I haven’t calculated it for a few years), the HOD or LOD is set within the first hour after the US session is open.  Once the HOD or LOD is in, there’s only one place that price can go… across the days range to the opposite LOD or HOD.  This allows for the greatest amount of directional movement on most days.   Now it doesn’t always happen that cleanly every day, sometimes it looks like a HOD or LOD is in, but price later in the day puts in the real LOD or HOD and then moves through the assumed HOD or LOD to new highs or lows.  However if part of your trading plan includes assuming you caught the HOD or LOD, you can set your large targets into support or resistance a significant distance of the average daily range (e.g. 50% to 80% of average range).  Every once in a while, you can catch the full ride.  Today was one of those days.  The first short order flow opportunity unfolded with a bounce off the DTG 97.25 short level.  Since it was early, an HOD could be assumed and a few contracts could be set to large targets.  In this case back to yesterday’s close area of 85.75 was reasonable.

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