On an outside day, what should be recorded?

An outside day is characterized by a price action where the day's high is higher than the previous day's high and the day's low is lower than the previous day's low. This indicates that the market has made a larger price movement overall compared to the previous day.

Recording the larger directional movement is crucial because it reflects the volatility and the potential change in market sentiment. An outside day often signals a reversal or continuation of a trend, making it an important indicator in technical analysis. By focusing on this greater price range, analysts can gauge whether traders are exhibiting increased buying or selling pressure, thereby informing future trading decisions.

Capturing this movement helps traders to adjust their strategies accordingly, as the outside day could symbolize a shift in market dynamics that is worth monitoring closely.