Entry Techniques
A trader can use the Intra-day Momentum Method in combination with any entry technique that he / she currently implements. The Method can be used as a guide to help a trader better understand intra-day price patterns and to help identify high probability, low risk trade entries for the low-to-mid frequency intra-day trader.
Risk Management
One of the advantages of developing a methodology based on ‘measured moves’, is that it allows a trader to attempt to control risk at trade entry. Once the Momentum Method has indicated the Daily Direction for the day, a trader knows that historically, the Close of the day has been above or below the Open approximately 75-80% of the time. This allows the trader to calculate with some degree of certainty, his / her risk exposure at the time of entering a trade.
Summary
The Intra-day Momentum Method was designed to give a low-to-mid frequency intra-day trader confidence in making better trading decisions. This method for determining daily direction is scalable and can be used in conjunction with any tool or technical analysis that a trader currently implements to arrive at his trading decisions. The method also helps a trader outline risk parameters for a trade, at the time of trade entry. This article is a brief description of the Intra-day Momentum Method, in a more advanced version of the method, I extend the Price Levels out, to determine historical probabilities of more events occurring.