Imagine someone named Xiao Du, who works the night shift in the underground parking garage of an office building. Whenever a car comes in, he has to look up to check its license plate and raise the barrier. He rarely keeps an eye on the market. He’s used to checking the closing price only once, around the time his shift changes.
On November 7, $PARTI opened at 0.0479. Before starting work, he bought some at that opening price.
After his shift change, he checked again. It had closed at 0.0478 that day, just 0.21% below his purchase price of 0.0479. At the time, he thought the price had barely moved that day.
Later, he looked at the day’s high and low: the price first dipped to 0.0462, which was 3.55% below the opening price of 0.0479. Then it climbed to a high of 0.0509, which was 6.26% above the open. The difference between the high of 0.0509 and the low of 0.0462 was 0.0047, equivalent to 9.81% of the opening price of 0.0479. From its high of 0.0509, it fell 6.09% to the closing price of 0.0478. The close of 0.0478 was 3.46% above the low of 0.0462.
Xiao Du later told a coworker on the same shift: “On the 7th, I bought at the opening price of 0.0479. I only checked the close, 0.0478, which was 0.21% below my cost, so I thought nothing much had happened that day. But it turned out the low was 0.0462 and the high was 0.0509—a difference of 0.0047, equivalent to 9.81% of the opening price.
“If all you did was check the close and saw that it had fallen just 0.21%, only to find out afterward that the day’s high and low differed by 9.81% of the opening price, would you feel that it’s fine to keep looking only at the close, or that you should also take a quick look at the day’s high and low?”
On November 7, $PARTI opened at 0.0479. Before starting work, he bought some at that opening price.
After his shift change, he checked again. It had closed at 0.0478 that day, just 0.21% below his purchase price of 0.0479. At the time, he thought the price had barely moved that day.
Later, he looked at the day’s high and low: the price first dipped to 0.0462, which was 3.55% below the opening price of 0.0479. Then it climbed to a high of 0.0509, which was 6.26% above the open. The difference between the high of 0.0509 and the low of 0.0462 was 0.0047, equivalent to 9.81% of the opening price of 0.0479. From its high of 0.0509, it fell 6.09% to the closing price of 0.0478. The close of 0.0478 was 3.46% above the low of 0.0462.
Xiao Du later told a coworker on the same shift: “On the 7th, I bought at the opening price of 0.0479. I only checked the close, 0.0478, which was 0.21% below my cost, so I thought nothing much had happened that day. But it turned out the low was 0.0462 and the high was 0.0509—a difference of 0.0047, equivalent to 9.81% of the opening price.
“If all you did was check the close and saw that it had fallen just 0.21%, only to find out afterward that the day’s high and low differed by 9.81% of the opening price, would you feel that it’s fine to keep looking only at the close, or that you should also take a quick look at the day’s high and low?”