Normal Variation of a Normal Day
Definition of 'Normal Variation of a Normal Day'
- The longer-term trader extends the range past the initial balance area.
- The short-term trader's initial parameters do not hold. There is some directional movement which extends the range and sets a new high or low parameter.
- If the range extension were wider than the initial balance, the longer-term trader would be in control. That's why maximum range extension on a normal variation day is roughly double the initial balance area.
- It's important to keep in mind, however, that this is the maximum. The range extension on a normal variation day isn't always that wide. It can be anywhere from a few ticks to about double the initial balance. Naturally, the wider the range extension, the greater the influence of the longer-term trader.
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