- Identifying early in the day whether we are in ranging or trending environment defines trading tactics going forward;
- If we are in a range-bound environment, we’ll identify a midpoint value of the range and fade moves that extend from it;
- If we are in a trending environment, we buy on the breakout and add at every low volume pullback until it works.
- NYSE Advance/Decline line value during the first half an hour of the day is usually a good indicator for ranging or directional environment for the rest of the day.
High-volume break-outs from prolonged in the time range is usually a start of a new powerful trend. The larger the volume and the longer the consolidation level prior to the break-out, the better the odds that the newly established trend will continue.