Outside Days

Outside days are a technical analysis indicator that measures the number of days a security closes outside of a defined price range. The price range is typically defined as the high and low of the previous day's trading range.

A security that closes outside of the previous day's trading range is considered to be an outside day. The number of outside days is then used to identify potential changes in the trend of the security.

A bullish outside day occurs when the security closes above the previous day's high. This indicates that there is strong buying pressure and that the trend is likely to continue higher.

A bearish outside day occurs when the security closes below the previous day's low. This indicates that there is strong selling pressure and that the trend is likely to continue lower.

Outside days can be used to identify potential reversals in the trend of a security. However, it is important to note that outside days are not always indicative of a change in trend. It is important to consider other technical indicators and fundamental factors when making investment decisions.

Here are some additional points to keep in mind when using outside days:

• The number of outside days is not as important as the direction of the outside days. A bullish outside day is more significant than a bearish outside day.
• Outside days are more significant when they occur after a period of consolidation.
• Outside days can be used to identify potential support and resistance levels.
• Outside days can be used to create trading signals. For example, a bullish outside day can be used to enter a long position, while a bearish outside day can be used to enter a short position.

Outside days are a useful technical analysis indicator that can be used to identify potential changes in the trend of a security. However, it is important to note that outside days are not always indicative of a change in trend. It is important to consider other technical indicators and fundamental factors when making investment decisions.