What a difference between Monday and Tuesday if you are a day trader of markets like ES, NQ, MNQ etc…..
Monday we saw some large moves, both up and down with good volume, then Tuesday came and we witnessed a consolidation, narrow range and lower volume.
Many times large trend days will be followed by narrow, range bound trading days.
Also volatility tends to cycle, higher volatility periods, followed by lower volatility. Obviously not an exact science but some observations.
So what you may ask? Knowing the type of environment you are trading is is VERY important as different styles, trading methods and money management techniques will work quite different in volatile days versus low volatility days, strong expansion trending days vs. range bound trading days etc.
So the sooner you can asses the type of trading day you are in and utilize the proper weapons from your arsenal, the better off you will be – in my opinion……
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