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All About Day Trading by Jake Bernstein

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CHAPTER 5How to Do It, Part III

Many different price relationships can occur in the markets. Many traders only look at the closing price of the market. In so doing they fail to understand the importance of closing prices in relation to the daily high, low, or opening price. Given price metrics to look at each day, it behooves a day trader to consider the various possibilities and how they may be used as either timing triggers or as tools by which to project market direction. My work over the last four decades has led me to the conclusion that, in terms of their predictive validity, some of the most important price relationships are those between the opening and closing prices on any given day.

TRIGGER 3: OPEN VERSUS CLOSE

When the closing price ...

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