Info!! Farther Conceptual Foundation For A Transitional Swing Trading System

My recent post illustrated how the non bad bulk of days run into the S&P 500 Index (SPY) merchandise higher upwards its previous day's high or below its low. Nearly one-half of all days, however, run into the marketplace unopen inside its prior day's range. That suggests that faux breakouts are common: many times, those moves to probe novel levels of value ultimately fail. If i tin educate filters to position the neglect days from the sustained breakouts, they would hold upwards good on the agency of edifice a worthy intraday trading system.

Might the same logic apply to weekly cost data, providing us amongst a possible swing trading framework? I went dorsum to June, 2001 inward SPY together with works life the following:

* About 56% of all weeks traded higher upwards the prior week's high; well-nigh 32% of weeks truly closed higher upwards the previous week's high;

* About 48% of all weeks traded below the prior week's low; well-nigh 22% of weeks truly closed below the previous week's low;

* Influenza A virus subtype H5N1 whopping 92% of all weeks merchandise either higher upwards their prior week's high or below their previous week's low; well-nigh 47% of all weeks ultimately unopen dorsum inside the prior week's range.

Again nosotros run into the mutual reversion: the vast bulk of weeks merchandise exterior the prior week's range, simply nearly one-half unopen inside that range.

If nosotros combine these observations amongst the transition swing merchandise organisation outlined earlier, a real promising "mean reversion" swing trading framework starts to emerge--particularly if i uses the intraday transition patterns to help execution.

That's all I convey to enjoin well-nigh that.
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