Usually we chart the market at it’s absolute level. But what, if we would just chart the net daily, weekly, monthly movement? Would this be an advantage? Would this show us new trading opportunities?
The short answer is: Yes! The trend is not everything, and it seems to be of some significance for further movements, if the market has moved more than x % from the beginning of the day, week or month.
But let’s have a look at some charts – and you will see how well it works:
The first chat is an intraday chart of EuroDollar, 8am-5pm CET. It shows you the daily net movement.