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Hi Dom,
From Robert Miner in his book "Dynamic Trading" page6-23:
"An outside-day is a period of range expansion. A market usually continues in
the direction of the close of an outside-day. The outside-day entry setup
requires the market to be monitored during the day."
Here are his setup conditions:
1) Only enter in the direction of the trend
2) For a sell setup, if the market first exceeds the high of the prior day
without having exceeded the low of the prior day, sell 1 tick/1/8th below the
low of the prior day.
3) Place the initial protective stop 1 tick/1/8th above the high of the entry
day up to the time the trade is entered.
4) Exit the position on the close if the close is above the current day's
open and prior day's close. The failure of the close to be in the anticipated
trend direction is a negative signal and reason to exit the trade.
"The outside-day entry strategy described requires the market to be monitored
during the day. If this is not possible, enter on the break of the
outside-day the following day if the break is in the direction of the trend."
Just a note - Miner does not mention outside-days when they pertain to
extended moves except to say to trade with the trend - Lenny
In a message dated 09/25/2000 10:55:15 PM Eastern Daylight Time,
domenick@xxxxxxxxxxxx writes:
> the auther has this to say about outside days "an outside day is
> one in which the price action extends over both sides of the previous day's
> action. if this action occur's after an extended move in either direction ,
> it usually marks close to, if not the end of the current move"
> Dom.
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