I wanted to take a quick glance at movement into the extreme. I looked at basically 2 things. In each day, relative to open, is the high bigger or is the low bigger? If so, which comes first? If we assume the bigger movement is the “correct” trade decision, the question is more like asking “will there be a dip or retracement before the big move? Or is it more likely to retrace after the extreme is reached?”
First I recalculated the min/max points, as well made two new columns for how “big” the ups and downs were. Which was more extreme, the high or the low? Then using vlookup and attaching numbers to the hours, I calculated which came first in the day, the high or the low? Finally, I checked to see if they were the same: “is the bigger also the same as the first?”
And the results:
A bit surprising. And convincing. If the up move is bigger, the low will occur first, and if the down move is bigger, the up move will occur first with 80% accuracy. This seems like it has potential.
Question: would the results be different if I calculated the bigger move as high-low of the current day rather than high-open of the day? (for up moves and vice versa or down moves)