Are the 30-Minute Bar Statistics Part of Your Day Trading?
If not why not? In my opinion, the 30 Minute Bar Statistics should be the cornerstone of your day trading? Why?
First, Let's Define Our Terms
Are the 30-Minute Bar Statistics for 30 minute traders? No. It is for those who trade within the 30 Minute Bar.
When I write about the 30 Minute Bar Statistic being part of your day trading, I am referring primarily to very short term traders, intraday traders, who are usually in and out of trades in seconds to minutes, not hours. Scalpers would certainly fall into this category but I hesitate to limit this to scalpers because what is a scalper really? In this context a scalper is defined as simply a very short term trader.
What are the 30-Minute Bar Statistics?
1. Range of the each 30-Minute Bar. It could be the Average Range, Median Range, Low Range or High Range. Of those 4 statistics, probably the Average and Median range statistics are the most important. Normally they are pretty close to each other. In most cases you should not worry too much about which one you choose, if you are not sure of the differences. What are the differences between Median and Average? That is for another blog post.
2. The statistical relationship between the current 30 Minute Bar and the previous 30 Minute Bar. This includes statistics on encompassing the previous period, (EPP), closing inside the previous period (CIPP), and staying inside the previous period (InsidePP).
Why the 30 Minute Bar Statistics Should be the cornerstone of your trading!
When you are trading, what is the most important thing you wish you knew? If you could make a wish, what would you wish for? Think about it for a moment. Answer: Where is the market headed next! If you knew that, all your financial worries would be gone!
Will the 30 Minute Bar Statistics grant your wish? Sorry, but no! There are no sure things in the market, at least not that will guarantee you profits. However, the 30 Minute Bar Statistics can help you to know where the market is likely to go, and where it probably will NOT go, based on past behavior. This can be invaluable when used properly. Now, before you get too excited, let me explain.
Here at statsfortrading.com we publish statistics on each 30-minute bar and its relation to the previous bar. One of the stats we publish is the InsidePP or Inside Previous Period (IPP) statistic. This is essentially answering the question, what are the odds that the current bar will be an Inside Bar, or, more accurately, how often has the current bar been an Inside Bar in the past 30, 90, 180, or 365 days. We give you a percentage of how often the given 30-minute bar does NOT touch or exceed the previous 30 Minute bar’s High or Low.
Another benefit of the InsidePP statistic is that you have a destination to trade towards, that is, if you have a low percentage. For instance, a low InsidePP statistic of 5.00% means that it has only been an inside bar 5.00% of the time, meaning it has tagged the previous edge, either high or low, 95% of the time. In my opinion, that is a pretty good stat, especially if the 30 min Median or Average range is high for that period.
The InsidePP statistic can also help you determine which 30 minute periods are more likely to have directional movement, especially when combined with the Range statistics. Conversely, a High InsidePP with a Low Range, may indicate a good time to stay out of the market. It helps identify 30 minute periods that are more likely to lack directional movement. If you would like to have the InsidePP statistic explained further, please watch the video below.
How to use the 30 minute statistics while day trading.
It is very easy to use the 30-minute bar statistics while day trading. Simply put a 30-Minute Bar Chart on your trading desktop. You may also draw lines or find an indicator that will draw lines at the top and the bottom of the previous 30-Minute bar’s High and Low.
By doing this, you can always see visually where you are in relation to the previous 30-Minute bar. Please see the graphic of part of my trading screen below. The image is a 30-Minute Bar chart that shows the current bar in relation to the previous bar. It has a Bar Length Counter on it to show the current 30-Minute Range and the ranges of the previous 30-Minute Bars.
Below is one of my main entry charts. Notice a box drawn around the 30-Minute Previous Period. This helps me to see where price is in relation to the previous 30-Minute’s High and Low.