Probability-Based Levels

This scientific approach has been designed to empower the intra-day trader. It assists the trader by determining the daily direction. The goal of the model is to determine which direction from the Open a stock or ETF would likely close on. This also determines which side of the Open a stock or ETF would move the largest distance in terms of price. This model has shown to be statistically significant over the past five years. The results in the following graphic demonstrate our findings using the model. The model has been applied to over 400 stocks from the S & P 500 (Since April 2015).

Historical Significance

Due to the historical significance of the levels, the trader is able to enter a trade that has a reasonable chance of success.

Historical Results for The Intra-day Momentum Levels

According to the data, the model was correct in identifying the daily direction 47-50% of the time. As a result of this study, we have learned a great deal. We have acknowledged our ability to determine the daily range. We also have been able to identify what a ‘Fast Move’ might look like.

When the intra-day reversal is avoided:

  • The levels produced for a LONG position were successful entry points ~57% of the time.
  • The levels produced for a SHORT position were successful ~54% of the time.

In the event of an intra-day reversal, the probability of success of the levels is reduced by 7%. A trader’s first goal should be to reduce the chance of getting into a stock that becomes an intra-day reversal. Above all, this will reduce his risk exposure and potential for large losses.

The levels provide invaluable information to the intra-day trader. This tool will allow the trader to become more profitable and risk-averse.