These extensions are calculated off the RTH opening range, also known in Market Profile circles as the Initial Balance. That is, the 0930-1030 High and Low. They provide useful support and resistance levels that can be used on their own, or in conjunction with other techniques.
They are calculated by the following formulae: OR = 60m High(ORH) - 60m Low(ORL) use 0930 start for US Indices A = OR/0.85 B = A – OR Ext 1 upper: ORH + B lower: ORL – B Ext 2 upper: ORH + A lower: ORL - A That’s it. |
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These two YM examples were on sequential days. Both times, Extension 2 upper nailed the high of day at around the same level both times. Watch them for support/resistance; particularly first touches. As with all forms of S/R, be particularly cautious if using to take a position counter trend. |
Two DYOs are needed. Both are straightforward.
The first one figures out the Initial Balance (opening range) and calculates the A and B values.
A word of caution on your symbol properties. The DYO uses the High/Low of 60mins after 1 st Open. For agreement with the DYO, this should be set to 0930 EST or other time zone equivalent. If your manual checking does not agree with the DYO result, check out your symbol properties first.
Global Variables 245-249 are used.
The second DYO completes the calculations and prints the results
The DYO should print yesterday’s extensions right up to today’s 0930 bar. No print will take place then until after 1030, when today’s extensions have been calculated.
If you want to print the extensions as they develop simply take out Line D. If you want to change the marker used to print the extensions, simply select different markers in Lines G through J.
If you don’t want extension values printed then simply blank out the Label boxes in Lines G through H.
For completeness we have included a print of the initial balance high and low. If you don’t want these, simply uncheck lines E and F.
That’s it.
Good luck and good trading.
JTicks and Sniffy