High Probability Short Term Trading Strategies

The 80-20's is a strategy we use for day trading. Many of our readers may. already
be familiar with The Taylor Trading Technique which is a reference manual for
swing trading. Simply stated, Taylor's method implies that markets move with a
natural rhythm that is made up of a buy day, sell day, and sell short day This pattern
is further evidenced by the research done at the Moore Research Canter by Steve
Moore.
Steve profiled days that closed in the top 10 percent of their range for the day. He
then tested for the percentage of times the market exceeded the profiled day's high
the following day and the percentage of times it actually closed higher. His research
showed that when a market closed in the top/bottom 10 percent of its range, it had a
80-90 percent chance of follow-through the next morning but actually closed
higher/lower only 50 percent of the time. This implies that there is a good chance of
a midday reversal.

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