Hi GR, that 200 points thingy is a statement. No, it's not an exception. I'm just trying to point out how could you use the 200 points info to make better trade decision.
A drop of 200 points in early morning and form an LOD signal will most likely be "calls happy" because the panic selling has all been done in the morning. So you can take advantage of this 200 points rule because you assume that it's not going to be invalid... sort of like how can you "invalid" a signal when it happens at an invalid range. 2 negatives = 1 positive.
While a LOD signal after a drop of let's say 100 points, it is more likely to drop more in the afternoon when compare to 200 points drop right in the morning. With the help of hindsight, we observed that for a HOD/LOD signal to be invalid, that day usually has a run of 200+ points. Most of the times, the 200 points range comes from a second leg action in the afternoon to break the HOD/LOD signal. This doesn't happen often, but you need to know the weakness of the signal, and how you can use the weakness to make money.
hum... sounds complicated? I've tried my best to explain it... ggg... you gotta admit that the LOD signal nailed the bottom of the day, eh? LOL
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