Every day, there is a tug-of-war in the market.
The bulls pull one way, the bears pull the opposite way.
At the end of the day, there is a winner for that specific day. At the end of the week, there is a winner for that specific week.
And so on.
But what does this mean? What are the implications for the average trader? I’ll tell you…
The Closing Tick Is a Big Deal!
All other things being equal, the closing tick is more important than any other tick of the day.
This is because the closing tick has a finality that the other ticks don’t have. The closing tick tells you where the market finished the day. It tells you whether the bulls or the bears won that day’s tug-of-war.
No other intraday tick can provide you with that information.
Which is one reason it’s difficult to be an intraday trader. You just don’t get as much insight into the market as an end-of-day trader.
Here’s how I see it…
- Following intraday ticks is like looking through a microscope.
- Following closing ticks on a daily basis is like normal vision.
- Following closing ticks on a weekly and monthly basis is like looking through a telescope.
Turns out, normal vision is a good thing for a trader to have.
It’s a good balance between low-level detail and high-level trends.
Moral: Don’t get too hung up on intraday ticks. Focus on daily closing ticks instead.
Best regards always,