Pre-Session Analysis Starts with the Daily Chart

 

I was recently asked on Twitter about my pre-session analysis. My response was simply that I've outlined the process in detail in the YTC Price Action Trader.

However, since publication, I have added a couple of minor steps. Let's look at one today.

It occurs just once a day, right at the beginning of my analysis process.

It involves the daily chart. And about 5 to 10 seconds of work.

Not for levels, or structure, or trend. We get those from our normal Higher Timeframe (HTF) and Trading Timeframe (TTF) charts.

The daily is used to provide a "best guess" as to the potential range of movement we can expect in the upcoming session.

There is no great accuracy required. I don't need to get it right within a small number of ticks. It's just a quick assessment based upon experience. Part of building our bigger-picture contextual awareness.

It allows me to operate throughout the day with some sense for whether the market has more room to move, or whether the market is possibly close to it's expected range already.

This is the chart layout I use:

<image: Pre-Session Analysis Starts with the Daily Chart>

 

Let's have a look at how it is constructed.

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

 

And the Three Step process for using this data.

 

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

<image: Pre-Session Analysis Starts with the Daily Chart>

Summary:

  1. My expectation for today's potential range starts as the Average Daily Range.
  2. I increase this slightly in an expansion environment, and decrease slightly during contraction.
  3. And adjust again as required, if a quick assessment of daily price action suggests good potential for either a wide-range trend day or narrow-range consolidation.

 

And of course, update throughout the day as more data unfolds.

Don't expect perfection.

It's just "background" contextual information that can be used as an input to your trade selection and trade management decisions.

Happy trading,

Lance Beggs

 


 

Written by

YourTradingCoach - Admin

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