11/20/2016 HowtoPickIntradayMarketDirectionThe80%Rule

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ExpertCharts,TradingTipsandTechnicalAnalysisfromINO.com

HowtoPickIntradayMarketDirectionThe80%Rule
December29,2011ByJeremyLutz

Like 19 Share Tweet Share 1.2K

Ifyoufollowourblog,thenyouaredefinitelyfamiliarwithtraderLarryLevin,
PresidentofTradingAdvantageLLC.Wehavegottensuchagreatresponsefromsomeofhispastpoststhathe
hasagreedtoshareonemoreofhisfavoritetradingtipsasaspecialtreattoourviewers.Determiningthedirection
ofthemarketcanbetrickyandjustplainconfusingattimes,butLarrysexpertopinionkeepsitsimple.Ifyoulike
thisarticle,LarrysalsoagreedtogiveyoufreeaccesstohisDoubleStoptradingtechnique.

LetmeintroduceyoutoonesimpletechniqueI'veusedtopickintradaymarketdirectionwith80%accuracy.

Wouldyouliketoknowifaparticulartradehasan80%probabilityofworking?Wouldyouliketoknowexactlywhere
toenterthattrade,andwheretoexit?Wouldyouliketotradethistechniquewitha2pointstoplossorless?

ItDoesn'tMatteriftheMarketisGoingUporDown,ThisSimpletoLearnMethodHasaHistoricalAccuracy
of80Percent!

Usingjusttwokeynumberseachday,floortradersandotherprofessionalscantrytopickthedirection,entryprice,
stoplossandtargetpriceofaparticulartrade.Itdoesn'tmatterifthemarketisgoingupordownthissimpleto
learnmethodhasahistoricalaccuracyof80%.Infactit'scalledthe80%Rule.

Eachmorningyouwillknowwhatthosetwokeynumbersare.Then,ifthesetupiscorrect,simplyenterthetrade,
setyourstops,setyourtargetpriceandsitbackwithatradethathasan80%expectancyofhittingthetarget.What
couldbeeasier?

Herearethebasicsforthe80%Rule:

TheValueArea(SecretTip#12):Therangeofpriceswhere70%ofyesterday'svolumetookplace.Forinstance,if
thevalueareaintheS&Psis138500139000,then70%ofthepreviousday'svolumetookplacebetweentheprices
of138500139000.
http://www.ino.com/blog/2011/12/howtopickintradaymarketdirection%E2%80%93the80rule/#.WDGBa9V94dU 1/7
11/20/2016 HowtoPickIntradayMarketDirectionThe80%Rule

The80%Rule:Whenthemarketopensaboveorbelowthevaluearea,andthengetsinthevalueareafortwo
consecutivehalfhourperiods.Themarketthenhasan80%chanceoffillingthevaluearea.

Thevalueareaandthe80%rulecanbeexcellenttoolsforjudgingpotentialmarketdirection.Manytradersfamiliar
withthevalueareaandthetechniquesthatgoalongwithituseittohelpthemdecidewhattradestodoeachday.

Acoupleofkeypointstoremember:

Ifthemarketopensabovethevaluearea,trytoenterashortpositionascloseaspossibletothetopofthevalue
area.

Conversely,ifthemarketopensbelowthevaluearea,aimtoenteranylongpositionascloseaspossibletothe
bottomofthevaluearea.

Onceyougetusedtoit,youwillfindthatusingthevalueareaeachdaywillbevaluableinyourtrading.
(Punintended!)

The80%ruleisasimplewaytoridethemarketasitpotentiallyfillsthevaluearea.However,thereisanexception
tobealertfor.Ifitthemarketopensabovethevalueareaandthengoesaboveorbelowit,the80%rulecanstill
comeintoplay.Watchforittogetbackintothevalueareaforthoseimportanttwoconsecutivebracketsor30
minutebars.

ClickheretoseeLarrysDoubleStoptradingtechnique.

BestTradestoyou,
LarryLevin
Founder&PresidentTradingAdvantage

Disclaimer:Tradinginfuturesandoptionsinvolvesasubstantialdegreeofariskoflossandisnotsuitableforall
investors.Pastperformanceisnotnecessarilyindicativeoffutureresults.

1.2K

FiledUnder:GuestBloggersTaggedWith:LarryLevin,marketdirection,MarketClubTechniques,technique,Tips&Talk,TradingAdvantage,
trends

Comments
http://www.ino.com/blog/2011/12/howtopickintradaymarketdirection%E2%80%93the80rule/#.WDGBa9V94dU 2/7
11/20/2016 HowtoPickIntradayMarketDirectionThe80%Rule

Chucksays:
January2,2012at4:14am
Hi,forthosewhodon'tknowmeasIamknowonmanyfinancialsites,Ithinkshorttermtradingisthewaytogo.
Howevertodoshorttermtradingyouneedhelp.First,youaretiedtothecomputer.Second,yourmindhastobe
clear.Thirdyouhavetosureofyourmethodandnotgiveasecondthoughttowhatyouaredoing.Astoprediction
ofpricemovements.Lookingattheremarksheremostofthemembersareintolotsoflaggingindicatorsthattrack
priceorconfirmamovement.PersonallyIdon'tlikebeinglateforanything.Thesemethodbydefinationarelate.
Astovalueareas,thismethod,seemsokifthemarketshaveagravitytothisareas.Itseems,althoughIamnot
sureofthis
thatyoutakeashortpostionagainstthevalueareaifthemarketopensabovethisarea,andyouusethestopout
astheborderoftheareaonthetoponcethepriceentertheareaandwait1/2hour,notsurefromthetimethe
marketmovesdownorfromthetimethetopisreached(firsttop)whoknows.

Tobehonestwithyouallifyouactuallycantradethisfor80%correctmoves
Iwouldbeverysurprised.ItistooiffyforwhatIread.Thecloseoutforprofitmovewithbeafterthe1/2hour.Istill
amnotsureofwhenthis1/2hourstartssoIdon'tknowwhereitends.

ShowmeGanntradersandmarketmappersandshowmeturningpointsinadvance.

Yes,Ihaveananswerforallofthis,butdoineedhelptoautomateit.

Chucksays:
January2,2012at3:42am
Howdoyougetvolumetofigureoutthevaluezone.Thepointthatthisatbestcouldbeverytimeconsuming
unlessyouhavesoftwarethatcomputesthis.

Iguessyoucanguessthiswithascattergramchartwithvolontheyaxisandpriceonthexaxis.onlythexaxis
hastobeadjustedforvoltimethenumberofshareorcontracts.Obviouslythisrequiresprogrammingandis
possiblebutifyoudon'thaveaprogrammerwhoworkscheapyouareout

JohnEgansays:
January1,2012at10:19pm
Wouldn'tworryaboutovernightasitshouldhaveconsiderablylessvolumeanyway.

denniskingsays:
January1,2012at12:53pm
TheVAisbasedonnormaltradinghours,notonovernighttrading.

LevinrecommendsgoinglongorshortasclosetotheextremityoftheVAaspossiblewitha12pointstop.This
doesnotworktoowellforlowvolumetradinglikeovertheholidays,butitworkedfairlywellon12/30.VAwas
1257/1250.50basistheMarchEMini.InthemorningittradedwithintheVAmeetingcriteriaatthe10AMbar,but
ralliedbackto1259.00stoppingoutashortat1257.00.Itthencontinuedtomeetthecriteria,andtradeddownto
1252.50between1:302:00PM,butthenralliedto1256.25beforetradingaslowas1251.25neartheclose.

TargetpricecanbetheotherextremeoftheVA,butcangolower/higher.PivotpointsandSP500support/resistance
levelscanalsobeutilizedtojudgetargetarea.Besttouseabreakevenorbetterstoponthesecondcontractafter
takingprofitsataninterimtargetonthefirstcontract.Tryfora2.53.0risk/rewardratiobasisa1pointstoponthe
firstcontract.Anyway,thatishowIthinkofit,butperhapsothersdoitdifferently.

Andrewsays:

http://www.ino.com/blog/2011/12/howtopickintradaymarketdirection%E2%80%93the80rule/#.WDGBa9V94dU 3/7
11/20/2016 HowtoPickIntradayMarketDirectionThe80%Rule

January1,2012at10:27am
Interesting....

Arethetargetpriceandthestoplosspointstheextremitiesofthevaluezone?

IuseInteractiveBrokers,whichprovidesrealtimeandverylowcommissions.Usingtheeminiisthevaluezone
determinedbasedonthefulldaytrading(includingovernightaction)?orjustonthenonoutsidenormaltrading
hours?

denniskingsays:
December31,2011at11:32pm
metoo,thanks

marcsays:
December31,2011at8:35pm
Thanks,John.IhaveTOSsoIwillcheckitouttoseehowhelpfulitmightbe.

JohnEgansays:
December31,2011at5:37pm
LOL!..MonthsagoIcheckedoutthissystemandhadtheverysamequestion..Sure..IfItooktimeandsalesfrom
yesterdayandranthemthruaspreadsheetIguessIcouldmassagethenumbersandcomeupwiththe'valuearea'
..ButItradeavarietyofstocksanditwascompletelyimpractical.

Ihavebeenplayingwith'VolumeByPrice'whichisavailableonStockCharts.comasanupperindicator.
Unfortunatelytheirchartsonlyshowdailyorweekly,soalthoughyoucancheckfor'headroom'or'vacuums'inthe
volumeatcertainprices,youcan'tseethoseareasonsaya5minutechart,soitwouldnotworkforthissystem.

However,ThinkOrSwimofferstheirplatformforfreeandtheydoimplement'VolumeProfile'asoneoftheirstudies.
Applyitforanychartonthe1minutetimeframeandyougetatopandbottomofthevalueareaanda'POC'which
prettymuchcorrespondstothemostactivelytradedtimeframe.Prettyeasytosee.

Luck!jegan

denniskingsays:
December31,2011at3:44pm
ifyouhaverealtimequoteswiththevolumetradedateachpriceontheEMini,youcandothosecalculations,butI
don't.Fortunately,BarryLevinpublishesthosenumbersinhisdailypremarketnewsletterwhichanyonecansignup
for.Heandhistradersalsohavewebinarsandprovideatrainingprogram.Theyevidentlyhaveupto12techniques
theyuse.Iusethepivotpoints,the80%rule,onetimeframing,and'readingthetape'usingtheMACD,slow
stochastics,andW%Ronthe30,10and5minutechartstotradetheSPYcallandputoptions.Youhaveto
extrapolateabitasMarketclubprovides20minutedelayedquotes,butIalsohaveIRAaccountswithFidelityso
haveaccesstorealtimequotesfromthem.WithmyHPlaptop,Idoalright.IamretiredsoIdon'thaveadayjob.I
wouldnotadvisedoingitunlessyouareabletodoitfulltime.However,thesetechniqueshaveprovidedmewith
someexcellentpositiontrades,andoneadvantageofusingtheoptionsis'stayingpower'sothatthereistheoption
ofcarryingapositionovernightorlonger,somethingoneprobablywouldnotwanttodowiththeEMiniwiththe
overnightswings.

marcsays:
December30,2011at5:13pm
Dennis,howdoyoudeterminethepriceareawhere70%oftheprevdaysvolumeoccurred?

http://www.ino.com/blog/2011/12/howtopickintradaymarketdirection%E2%80%93the80rule/#.WDGBa9V94dU 4/7
11/20/2016 HowtoPickIntradayMarketDirectionThe80%Rule

denniskingsays:
December30,2011at4:33pm
the80%ruleisbasedontheEMini.Thevalueareaisthepriceareawhere70%ofthepreviousdaysvolume
occurred.ItisakillerindicatorfortradingtheEMiniwithlowriskentrypoints.Oneneedsrealtimepricesforbest
use.ThePOC(pointofcontrol)isinthevalueareaatthepricewherethehighestvolumetookplaceandactsasa
pivot.

LanceJsays:
December30,2011at10:34am
Here'swhatIthinkwouldbeawesome.Ifthiswasreallyaccurate80%ofthetime,ifMarketClubcouldaddthisto
theSmartScanareaformemberssayrightunderStrongDMAsomethingthatsaid80%Rule.Itwouldthenscan
andreturnallstocksthatwerebuysignalsonthe80%rule.

Imeanthinkabout.Ifitreallywasright80%ofthetime,thiswouldbeextremelyvaluablenotonlyformembers,but
forMarketClubaswell.Imaginethekillermarketingyoucoulddoforasystemthatwasright80%ofthetime.It
couldsupplementthetradetrianglestechnologynicelyastheytendtobecomelessusefulintradingmarketslikethe
kindwe'vebeenin.Inatradingmarket,youjustswitchovertothe80%RuleSmartScan.

dpsays:
December29,2011at7:20pm
isthevalueareasimplythepreviousdayhigh/lowrange

SchuylerHalessays:
December29,2011at4:54pm
needsecrettip#12............pleaseinformhowtoobtainthis

RCMsays:
December29,2011at3:56pm
Averyinterestingtip.butasMrGicenoted,itwouldbealotmoreusefulifMarketClubwouldoutlineaswellthe
processfordeterminingthefiguresyouareworkingwith.Pleaserespond.

rcm

MrGicesays:
December29,2011at1:15pm
Howisthe"ValueArea"determinedandcanthisbeappliedtooil?

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