Building on from TPO Part 2:
There are 6 different Day Types within TPO charts.
Day Types specifically help identify a range or trend to be traded. Using Initial Balance (IB) with the previous day's context can be used to predict the Day Type.
Initial Balance in the Crypto Market is always the first hour of the opening day's session at 00:00 UTC, be sure to calculate your time zone difference accordingly.
To understand this effectively it is important to have completed the Footprint Modules, and have studied Initial Balance.
Building on from TPO Part 2:
There are 6 different Day Types within TPO charts.
Day Types specifically help identify a range or trend to be traded. Using Initial Balance (IB) with the previous day's context can be used to predict the Day Type.
Initial Balance in the Crypto Market is always the first hour of the opening day's session at 00:00 UTC, be sure to calculate your time zone difference accordingly.
To understand this effectively it is important to have completed the Footprint Modules, and have studied Initial Balance.
Key Points of the Lesson
UTILITY
Use the six day types to plan the trading day ahead.
Apply previous day type and Initial Balance as context.
Start the trading day one step ahead of the competition.
IMPLEMENTATION
Specialized software is needed such as Exocharts or Atas.
Standard TPO template shows the daily session.
Compare with the previous day(s) type ⇒ Add Initial Balance of the current session.
NORMAL DAY
Very wide Initial Balance ⇒ Larger trader enters upon market open.
Generally, results in a balanced day.
Typically seen in the stock market, less often in Crypto.
NORMAL DAY VARIATION
Smaller Initial Balance followed by range extension within the first 6 hours.
Price advance stopped by the London Stock Market open.
TPO profiles can look like ‘P’ or ‘B’.
NEUTRAL DAY
Initial Balance in the middle of the balance (range).
First attempt to break through the range highs fails, and first attempt to break through the range lows fails.
Best if with Buying Tail and Selling Tail.
NEUTRAL DAY VARIATION
Similar to a Neutral Day, but the session close is at the high or low of the day.
Provides a clue to the possible momentum the following day.
Useful for the stock market (scalp trades at next day market open) ⇒ Not recommended for Crypto.
TREND DAY
Strong, one-directional move with increases in Volume, Delta and Open Interest.
Price action leaves rows of Single Prints, one-time framing occurs (each previous candle high or low is not broken).
Counter-trading the impulse is not recommended ⇒ Can push through the strongest levels.
DOUBLE DISTRIBUTION DAY
Two Neutral Day profiles are separated by one large column of Single Prints.
One single impulse separating the two balances (ranges) ⇒ Trending day contains multiple impulses.
Trading strategy involving Double Distribution is covered in a separate module.
TIPS & TRICKS
Neutral day
The Neutral Day type offers the perfect range-bound environment.
High probability of range continuation the next day.
Occurs often in the Crypto market.
When trading a trending market ⇒ trade with the direction of the trend.
When trading a range-bound market ⇒ shorts at the highs, longs at the lows.
When a range is broken with increasing Volume, Open Interest and Delta ⇒ Can turn into a trend, don’t counter-trade.
TAKE HOME MESSAGE
Recognize the Day type to be on the right side of the market.
Use the previous Day Type and Initial Balance as context.
Be one step ahead of the competition.