Tech/a,
The point of chart reading is understanding certain set-ups....
For example :- trend is down and I want to short trade a higher Daily open
as it moves down and exit for the day
Where price closes is important for the next days trading, because in
relation to the S&P and Thursday's trading:- breakout
A trader understands the concept of retesting the break using
support/or trading the break:- resistance.
So the trader can then trade shorts and longs on Thursday.
If Friday follows a continuation down, then the trader would focus solely
on trading shorts, simply based on today's close and 5-day trading
set-ups:- because there is a break of the Weekly lows.
If it doesn't follow a continuation down on Friday, then hopefully the
trader has some intra-day techniques that allows him or her to take
small chunks out of the ATR as it moves higher.
This gets back to holding and folding.
SPI Trading:-
I've already factored in Friday's trading, by yesterday's 12.14pm post.
I already know what & how and I'm going to trade today.
But the SPI isn't opening near or around 3560 and a higher open.
so it changes how I'm going to trade today on the open, as my
probability pattern isn't set-up for today's trading on the open, so I would focus on taking small chunks out of the market:- 10-20points.
If the SPI opened near 3560 then I would look to hold for longer moves
down, as long as it remains below 3560, that's because it's a breakout of a
5-day range from yesterday, price has come back to retest the break and
now continues down with the overall weekly trend.
A Daily trend has a random length:- 44 points or double that, which is often the case 2x44 ranges, or it could just continue 200 points in the same direction.
The whole point of understanding the patterns in the market is so you
can optimise your trading even though your system has given an
intra-day signal, which often can give a lot of false ones.