Extended Levels

The Intra-Day Momentum Method Levels extend out from the Open to three extensions in both directions. By extending the levels out we can define more patterns and determine if trend-following would give a trader an edge. We can determine how far a stock might travel on any given day. We can also define what a ‘Fast Move’ might look like.

Historical Significance

We divided different ranges by the calculation used to determine the ML1. In order to determine how significant the extended levels were over the past five years. We found surprising results. In the instance of the measurement from High – Low over 90% of the data collected would not need an additional level. Because the level are determined from the Open, this was just a test. When we look at the same calculation among the measurements from High – Open we found that over 95% of the data fell in that range. When we observe the same calculation over the measurements from Open – Low we found that over 93% of the data fell in that range. These calculations indicate that we did not need an additional level to determine the possible range of the day.

Does Trend Following Give a Trader an EDGE?

We can also use the extended levels to find out if ‘Trend Following’ would give a trader an edge. Read this article (Does Trend Following Give a Trader an EDGE?) to see how we demonstrate that trend following would likely give a trader an edge.

Can We Determine the Probable High/Low for the Day Using this Data?

Now that we know the probabilities of an extended level being reached. We will use this information to form probabilistic outcomes as to where the High or Low of the day may present itself. Take a look at the following article: Determining the Daily High/Low with The Intra-Day Momentum Method.