Incorporating the Initial Balance

Looking at Crude Oil the last few days, this is a great opportunity to begin the discussion of incorporating the initial balance. The first examples I will use are in reference to gap days. These open types are often difficult for many because there is no structural reference to lean on for a trade location. The market has completely separated from the previous session’s range and structure and we now have no immediate reference. Do we go long or short?

In this example, I will show some common occurrences with gap days. As I mentioned, the market is opening very far away from where we were trading in

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