A trending day is one that has a clear direction: Either UP or DOWN
This is as opposed to a trading range, which is horizontal chop up-down-up-down with no real net movement.
Days that begin in the MIDDLE of the previous day's range are less likely to be trending.
Days that begin ABOVE or BELOW the previous day's range are more likely to be trending.
I have made some of my biggest mistakes trying to trade when the direction of the market isn't clear. Here is an example from April 21, 2023:
BEFORE market open:
- Opening in middle of previous day's range
- Significant resistance (supply) at upper part of range (red rectangles)
- Significant support (demand) at lower part of range (green rectangle)
- In addition, whether the market finished the week "up" or "down" compared to its open is smack in the middle of the range. Both bulls and bears will want to state their case by keeping control.
These, together, imply (but certainly don't guarantee) that maybe the day will just churn between these extremes.
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by afternoon:
- Literally no net movement.
- Bulls never overcame Supply (red rectangles)
- Bears never overcame Demand (green rectangles)
Were there chances to scalp small profits? Yes, there always are. But when you are starting out, you need to play in the direction of the market to keep probabilities in your favour. Days like this are directionless.
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