Previous Day's Close

[trhudson]

My preliminary research shows that the location of the Previous Day's Close has a great influence on which side the market should be traded the following day. Does anyone else use this type of analysis to indicate the following day's direction?

 

[FixedGrin]

I see that at the moment only 2 people voted =/ I saw this thread and thought there would be a few more responses than that

 

[Soon2Bgreat]

...as with most things it's more useful in some markets vs. others imo - you can also look at other prices like vwap.

 

[trhudson]

I agree, may be helpful in some markets, while not helpful in others.

I am quite surprised that the results when I apply this filter to many different stocks / etf's it seems to be an extremely important indicator.

This implies that if I trade a specific strategy long / short when the previous day's close is not in the right location, overall, it's a losing strategy. (Over 8 years of intra-day testing).

My research shows that if I apply a filter on a daily basis it will certainly help increase the profitability of my intra-day methods.

 

[Crispy]

I voted yes.

From an auction market point of view the final settlement price of the previous days action is very important. Prices holding or breaking this level can be indicative of which side of the mkt it makes more sense to be on for daytrading.

 

[trhudson]

I am referring to the POSITION of the CLOSE in relation to the entire day's range.

 

[Crispy]

Quote from trhudson:

I am referring to the POSITION of the CLOSE in relation to the entire day's range.

This is what my eyes saw "location of the Previous Day's Close".

Anyhow, my actual trading, not research indicates the close is a valid level for anybody with their eyes open.

Good luck in your quest.

 

[trhudson]

Quote from Crispy:

This is what my eyes saw "location of the Previous Day's Close".

Anyhow, my actual trading, not research indicates the close is a valid level for anybody with their eyes open.

Good luck in your quest.

I certainly agree that the CLOSE is valid. I was just testing to determine if it's location could give me an indication of what side of the market to be on the following day.

 

[dtrader98]

I'd say it's a very good observation.
Check your PM.

 

[ocean5]

Not certain as the certainty.Why don`t you start with the certainty instead?