Long Term Secrets To Short-Term Trading

Figure 2.10 Nikkei Stock Index (daily bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 

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Figure 2.11 S&P 500 Index (5-minute bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 
Figure 2.12 S&P 500 Index (30-minute bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 

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Figure 2.13 S&P 500 Index (60-minute bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 
the S&P 500 (see Figures 2.11, 2.12, and 2.13). In Figure 2.11, each bar reflects the high, low, and close of 
every 5-minute time period for two days, chosen at random. As you can see in almost a glance, the large bars 
are preceded by smaller bars. Figure 2.12 shows the use of a 30-minute bar to capture the markets swings 
for a full week. Again the facts speak for themselves, virtually every long-range bar, the only place we 
short-term traders make our money, has been set up by one or a series of small ranges. Figure 2.13 is based 
on hourly bars and again the phenomenon is present. It takes no tea reader or mumbo jumbo spin-doctor to 
hype or stretch these facts. What's there is there, always has been and always will be-we are continually 
alerted to those moneymaking, large-range bars by the early warning of small ranges. 
The Importance of the Open to Low or High of the Day 
Here is the second absolute truism about large-range days, those big blast-off days we short-termers 
simply must have to come out ahead; large-range up close days usually open close to the low and close on 
the high. Large-range down close days open around the high of the day and close near the low. 
This means you must take two things into consideration in your trading. The first is that if we are