💡🚨 Chop vs Trend
I Often Teach that we should Go Full Size on Trend Day and be cautious on a Chop Day.
Now I will try to explain how to identify this, so we can Deploy our Cash into A+ Trend Day for decent risk reward returns👊
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1. 10 AM Concept plays a big Role
New Highs or Lows by 10 to 10:30 AM: A clear indicator of a trend day is when the market reaches a new high or low by 10 to 10:30 AM, moving beyond the range established during the opening hour or first 30 minutes.
2. PM Highs & Lows
If, in the first 30 minutes to an hour, the market extends beyond the premarket highs and lows, it suggests a likely trend day. In contrast, if the market action is confined within the premarket high and low range, this typically leads to a more directionless or choppy trading session. Trend can be bearish or bullish
3. Over Yesterday High & Lows
Surpassing Yesterday's Highs or Lows: A market that crosses beyond the previous day's highest or lowest points, particularly following an inside day, often signals a trend. Breaking above yesterday's high suggests a bullish trend, while breaking below yesterday's low indicates a bearish trend. #tradingtips
4. Movement of Stocks in Key Indices: When most stocks within major indices like the S&P 500 (SPX) and NASDAQ (QQQ) are making new highs (for a bullish trend) or new lows (for a bearish trend) in the first hour, it strongly indicates a market-wide trend day. For example, if the semiconductor sector stocks within these indices are uniformly setting new highs or lows, it's a clear sign of a trending day in that sector (today)
5. EMAs or EMA clouds can can help to understand the chop vs trend. In Chop Price moves up down the EMA, in trend either bearish or bullish Price rides the EMA clouds , for my system it rides 5-12 clouds making higher lows or lower highs depending on bear or bull trend
6. If Market makes a huge move at open and does not retrace all the way back to opening price but rather flags into 10-10.30 am and breaks that flag either bear or bull flag we get the Trend Bull or Bearish Trend does not matter. #tradingtips
