1D Expected Move Indicator
The 1 Day Expected Move is Menthor Q proprietary indicator. It is a Volatility Indicator that helps set a daily price range. The goal is to forecast the next day price action. It has an upper and lower band: the 1D Max Move and 1D Min Move.
- 1 Day Max: this is the maximum price move that according to the indicator can be expected for the next day.
- 1 Day Min: this is the minimum price move that according to the indicator can be expected for the next day.
To note these are indicators that use assumptions to come up with that range. So please use discretion when looking at this data. We have created a Backtesting exercise that shows the result of the 1D Exp Move on the SPX Index:
This is the result of that exercise.
How to access the 1D Exp Move Indicator
You can see the 1D Exp Move in the Key Levels Table.
You can also access the Menthor Q Levels Indicator on TradingView and plot the levels in the chart.
Use Cases of the 1D Exp Move
The 1D Exp Move can be used to manage our risk, place our strikes or directional trades. We can look for potential reversals on the 1D Move or potential pullbacks. In this example we can see the price action on the Russell 2000 Future where the price bounces on the indicator for a nice pullback to the upside.
Let’s look at another example. We can see how the spot price broke above the 1D Expected Move Max. What we know, through backtesting, is that when that happens, there is a higher probability that the price moves back at the 1D Max Move or below. Here we can see clearly how the price broke above that 1D Move Max.
While this is an interesting trading strategy, we have also backtested spot price within the 1D Min and Max ranges. This can be helpful when we are setting spread option strategies and need support in placing our strikes.
You can find the 1D Move Indicator within the Premium Membership.