How to use the CIPP Statistic to improve your day trading

CIPP OHLC Bar

What is the CIPP Statistic?

Another one of the statistics we publish is the CIPP statistic.  It stands for Closed Inside Previous Period.  This statistic identifies how often a 30-Minute period or a 30-minute bar has closed inside the previous 30-minute period.

This time in our graphic we us a OHLC Candle so that you can see where the bar closes. As you can see in the graphics below, price of the Red Bar exceeds the high of the previous 30-minute Green Bar and then comes back down closes inside the previous Green Bar’s High and above its Low.  

Our CIPP statistic identifies how often this happens in every 30-Minute period.

CIPP OHLC Bar
CIPP OHLC Bar with Lines

How could a trader use the EPP statistic?

You might be wondering how this statistic could benefit your day trading.  This statistic should be used in conjunction with the other two statistics, InsidePP and EPP.  Take a look at a portion of our 30-Minute Range Report in the graphic below:

CIPP Report Example 11:00am

As you see in the above graphic, we have a potentially favorable period.  We have a historically decent range, 29 ticks for Crude Oil.  We have a very low EPP statistic and a very low chance that it will be an Inside Bar (InsidePP statistic).  

Looking at these statistics reveals that during this time period, price frequently breaks through the High or Low of the Previous Bar and rarely comes back in and tags the other edge of the previous 30-Minute period (EPP).  In addition, a fair amount of time, 70% (the 30% statistic inverted), it closed outside of the previous 30-minute period.  This could be because the market ran a bit and didn’t retrace very far or even didn’t retrace at all.  That is just one possibility.  There are others.  Whatever the case, you, at some point, see where the market has not gone around 70% of the time, in the 30 days prior to this report.  Just to be clear though, this statistic only applies to the Close.  It is possible that price action could retrace and then go back out.  

This statistic helps you the same way the other statistics do.  The historical statistics form the basis of allowing the day trader to think in probabilities.  In my opinion, knowing where the market is likely to go and where the market likely will not go, is very valuable.

If you want to learn even more about the CIPP statistic, please watch the CIPP Lesson in our Statistics for Trading Training Course.  

Thinking In Probabilities

Here at statsfortrading.com, we try to provide day traders statistical information because we believe that statistics are the basis for thinking in probabilities.  When you think in probabilities, your trading decisions are based on facts and not emotion.  

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