Building on from TPO Part 2
There are 6 different Day Types within TPO charts.
Day Types specifically help identify a range or trend to be traded. Using Initial Balance (IB) with the previous day's context can be used to predict the Day Type.
Initial Balance in the Crypto Market is always the first hour of the opening day's session at 00:00 UTC, be sure to calculate your time zone difference accordingly.
To understand this effectively it is important to have completed the Footprint Modules, and have studied Initial Balance.
Time Stamps
1:21 – DAY TYPES
- Day types help us get heads up to trade for a range or trend
- There are 6 different day types within TPO charts
- One can use the IB (initial balance – in crypto it is the first hour of the daily open) with the previous day's context to predict the day type ahead.
3:50 – NORMAL DAY
- It starts with a very wide IB (spike in volume). This initial price action generally results in a balanced day as the larger traders enter upon the market open.
- This is not a common type in cryptocurrency but it is seen a lot in the stock market (bigger traders enter and leave the position).
9:17 – NORMAL VARIATION
- The IB is smaller which results in range extension within the first 6 hours (Igor time session 1). Advance is stopped by London open and price ends up forming a range. It can look like P and B profiles.
13:18 – NEUTRAL DAY
- Daniel’s best and most preferred day type – a perfect range bound day
- IB is in the middle of the balance. First attempt to break range high rejects and the first attempt to break range low rejects. It is best with a BT (buying tail) and ST (selling tail)
- This is a perfect range-bound environment. Even if you do not recognise the neutral day type, the next day should continue to trade as a range – long the lows and short the highs (very high win rate).
22:18 – NEUTRAL DAY VARIATION
- It is like a neutral day but the market close is at the low or at the high of the day. This gives a small heads up of next day momentum.
- This applies more to the stock market, Daniel does not trade this in crypto. If the stock market closes with a big momentum you expect it to continue the same way on the next open.
25:00 – TREND DAYS
- There is a strong one-directional move with increases in Volume, Delta and OI. The market leaves the row of SPs and onetime framing (each previous high or low is not taken out)
- So, if you see one-time framing with an increase of OI, volume and delta, do not try to short it even if it comes to a level of resistance and do not try to long it even if it comes to support.
- That is why Daniel does not pre-set orders.
33:44 – DOUBLE DISTRIBUTION
- Two neutral day profiles separated by one column of SPs (single prints)
- An easy strategy to trade off of…
37:55 – TPO TRENDING DAY
- There are four range bound day types (normal and neutral with their variations)
- There are two trend day types (trend and double distribution)
- You have to look at the previous day and the IB to help determine the context of current-day type early on
- When trading a trend bound market we look to trade with the direction of a trend
- When trading a range-bound market we look to trade shorts at the highs and longs at the lows of the range
- When a range is broken with an increase in volume, delta and OI it can turn into a trend (don’t look to fade).
42:15 – SUMMARY