On Thursday morning I woke to find two emails somewhat related to the same topic – the challenging trading conditions we've experienced so far this week.
So my first thoughts were to expand upon a topic I shared via social media a bit over a week ago. Because I know that only a small fraction of you receive my social media posts.
And this one is important!
Here's the post which shows the daily chart for NQ as at the 1st of June. The same concept applies for ANY market.
Let's first talk about what is showing in the bottom half of the image. And then we'll get to "what it means".
It's simple to set up:
Nice and easy.
And it gives an immediate comparison of the current days range versus the average over the last month.
So let's see exactly what prompted the email concern over challenging trading conditions.
The emails related to ES and CL, but I'll start by updating the earlier social media post.
This is NQ as at the time of writing, early on the 9th of June 2016:
Of course, low daily ranges DO NOT necessarily mean a tough session. There are other factors involved as well.
But for many of us, who operate a strategy that requires price movement to profit, there's a high likelihood that narrow range days are those that get on our nerves.
Narrow range = limited opportunity = frustration!
Here's the thing though…
It's completely normal. Narrow ranges are a part of the game. And we need to learn to work with them.
We need to learn to profit over the longer time scale… comprising periods of both wider range markets and lower range markets.
The good news though, if you're stuck in a period of quiet markets and narrow ranges, is that it won't last. At some point the markets WILL move.
So what do we do with this data?
1. Use it manage expectations.