Types of market day-

1. Trend Day-

On a bullish Trend Day, the open usually marks the day's low, while the close usually marks the day's high, with a
few ticks of tolerance in either direction.

On a bearish Trend Day, the open will usually mark the day's high, while the market will usually close near the
session's low. The market will typically start fast on this type of day and the farther price moves away from value,
the more participants will enter the market, creating sustained price movement on increased volume.

Initiative buying or selling is the culprit on this type of market day, as these participants are confident they can
move price to a new area of established value. Price conviction is strongest during a Trend Day.

These types of days only occur a few times a month, but catching these moves can certainly make your month, in
terms of profits. The Trend Day is usually preceded by a quiet day of market activity, which is usually a day with a
small range of movement. Coincidentally, this type of market behaviour will usually follow a Trend Day as well.

2. Double distribution trend day-

While this day is a trending day, it in no way has the confidence or conviction of a Trend Day. Instead, this type of
day is characterized by its indecisive nature at the outset of the session. During this type of day, the market will
usually open the session in a quiet manner, trading within a fairly tight range for the first hour or two of the
session, thereby creating an initial balance that is narrow. The initial balance is traditionally defined as the price
range of the first hour of the day, which is extremely important to professionals on the floors of the exchanges. They
use the initial balance high (IBH) and the initial balance low (IBL) as important points of reference in order to
facilitate trade between buyers and sellers. If the initial balance is too narrow, price will break free from the range
and auction toward new value, creating range extension, which is any movement outside the initial balance.

After the initial balance of the Double-Distribution Trend Day has been defined, price will break out from the
range and auction toward new value, where it will form a second distribution of price. This is the market's attempt
at confirming whether new value has indeed been established.

3. Typical day-

The Typical Day is characterized by a wide initial balance that is established at the outset of the day. On this type
of day, price rallies or drops sharply to begin the session and moves far enough away from value to entice
responsive participants to enter the market. The responsive players push price back in the opposite direction,
essentially establishing the day's trading extremes. The market then trades quietly within the day's extremes the
remainder of the session. The opening rally or sell-off is usually sparked by reactions to economic news that hits
the market early in the day. This opening push creates a wide initial balance, which means the day's "base" is wide
and will likely go unbroken. Remember, if the base of the coffee table is wide, it will likely remain upright regardless
of any added pressure or weight. Likewise, a wide base during the first hour of the market will likely mean that the
day's extremes will also remain intact, or unbroken.

During this type of day, you will usually see price trade back and forth within the boundaries of the opening range, as
fair trade is easily being facilitate.
 4. Expanded typical day-

This type of day is similar to the Typical Day in that it usually begins the session with early directional conviction.
However, price movement at the open is not as strong as that seen during a Typical Day. Therefore, the initial
balance, while wider than that of a Double Distribution Trend Day, is not as wide as that of the Typical Day, which
leaves it susceptible to a violation later in the session. Eventually, one of the day's extremes is violated and price
movement is seen in the direction of the break, which is usually caused by initiative buying or selling behaviour.

Notice the initial balance was wider than that of a Double Distribution Trend Day, but not so wide as to challenge
the width of the Typical Day. When the base of the day is neither wide nor narrow, it can be a coin flip whether a
breakout will occur. The fact that the initial balance is not wide introduces the potential for failure at some point
during the day at one of the extremes. In this particular case, initiative sellers overwhelmed the bottom of the day's
initial balance and extended price movement to the downside. Selling pressure essentially expanded the day's range,
thereby introducing the namesake for this type of day. The initiative selling pressure led to continued weakness the
rest of the day, as price moved to establish lower value.

Keep in mind that during an Expanded Typical Day, both the upper and lower boundaries of the initial balance are
susceptible to violations. On any given day, you will see one, or both, of the boundaries violated, as buyers and
sellers attempt to push price toward their own perceived levels of value.

5. Trading range days-

The Trading Range Day occurs when both buyers and sellers are actively auctioning price back and forth within the
day's range, which is usually established by the day’s initial balance. On this day, the initial balance is about as wide
as that of a Typical Day, but instead of quietly trading within these two extremes throughout the day, buyers and
sellers are actively pushing price back and forth. This type of day is basically like a game of tennis. The players
stand on opposite sides of the court and take turns volleying the ball to one another throughout the match. As the
ball is in flight, a player will wait for the best opportunity to strike the ball, essentially returning the ball to the other
side of the court. Likewise, buyers and sellers will stand at the extremes of the day and will enter the market in a
responsive manner when price reaches the outer limits of the day's range. Responsive sellers will enter shorts at
the top of the range, which essentially pushes price back toward the day's lows, while responsive buyers will enter
longs at the bottom of the range, which pushes price back toward the day's highs. This pattern will continue until
the closing bell sounds.

Notice that the initial balance was fairly wide to begin the session, which meant that the base for the day would
likely support the session's trading activity. As price rose toward the top of the range at around 9,740, responsive
sellers saw price as overvalued and entered the market with sell orders, essentially pushing price back toward the
days low. As the price approached the bottom of the range at around 9,660, responsive buyers saw value and
entered the market with buy orders, which pushed price toward the opposite extreme. This type of market day
offers easy facilitation of trade and gives traders amazing opportunities to time their entry.

6. sideways days-

During a Sideways Day, however, there is no volleying of the proverbial tennis ball between buyers and
sellers. As a matter of fact, there isn't even a game being played. On this type of day, price is stagnant, as
both buyers and sellers refrain from trading. This type of session usually occurs ahead of the release of a
major economic report or news event, or in advance of a trading holiday. There is no trade facilitation and
no directional conviction. The initial balance is rather narrow, which at first indicates the potential for a
Double Distribution Trend Day. However, the initiative buying or selling required for a Double Distribution
Trend Day never enters the fray, which leaves the market terribly quiet the rest of the session.
 Figure 1.7 shows a five-minute chart of a typical Sideways Day, which occurred the day before the
Thanksgiving holiday. The YM opened the day with a narrow initial balance and range extension was seen to
the upside for a brief period of time. However, initiative buyers did not enter the market in force, which
essentially caused price to reverse from the session's high to settle within an extremely tight range that
spanned about 25 ticks over the final four hours. The range actually narrowed to a 14-tick spread in the final
hour of the day, indicating that market participants had either fallen asleep or had hit the pub early.

The difference between profitable traders and losing traders can usually be summed up by the number of
unprofitable days and the severity of unprofitability on these days. Learn to eliminate those unprofitable days by
only trading in the most favourable market conditions, and you will prosper in this game.

"The only thing to do when a man is wrong is to be right by ceasing to be wrong."

- Jesse Livermore