I've found that first 10 mins of the day, for index futures at least, to be least consistently catchable. Ive spent 1000's of hrs doing this. Just what Ive found. But after 9:40, things completely settle in for me. doesn't mean I'm right or wrong, just from my experience, I've found this to be true.
I trade the equivalent of a straddle on the open, counting on that noise to push me out of the range. But other than that, I don't do *any* trading of my strategy until 10:05 AM. I've done some backtesting, and for me at least, it just works out better that way.
Try working on a mechanical entry for the open. The stress comes from not knowing what you are doing. Also consider the 9am est reports coming out. Generally professionals are getting in before the report comes out expecting it to fuel the move. Also consider the 8.30am est report. Hey, the market is open all day. Trade selection is key. Be patient. John
There are two aspects of the open which must be considered. 1. Yesterday 2. The premium Consideration of yesterday. I check out about 32 items. I call it a preflight check. By knowing what is going on in terms of "how the market works", you get a thorough context. By filling in the blanks on the sheet, I have to look to where to get the value, do the calc's and write, with a ball point, the value entry after entry which brings me right up to preopen housekeeping. There is also the day's upcoming new information in the form of standard reports, etc. I have quantification of their effect on what I trade and it moslty relates to the cascading levels and how many will occur as the IB close out accounts. The best and most significant cascading was 27FEB a while back. reading the stalls was intersting but most of all reading the DOM's level of imbalance and lack of orders was fantastic as a statement. I camtasia'ed the whole nine yards and did a voice over for the archives. The Premium. Information provided by the interrelationship of the cash and the index is priceless. The premium is calculated and its directional offset is in itself a wonderful indicator. The considerations include: 1. How long it is out of whack during the open. 2. The damping mode (3) of how the vanishing point is reached Then you come to "reading the premium" after this synchronization ends the random walk and chaos theory applications. 3. Volatility compression and expansion begin to play as a record of smart money leading the herd. 4. Drift enters the picture and it drives a lot of bots and algos 5. Leading indications of high velocity trader trends 6. Sustaining indications of trends. 7. Strength of trends. 8. Trend ends and trend reversals 9. Non trending 10. IB's taking small traders out of the market as they blow out (cascading). For reporting and planned news there is another series of reads, mostly known combos of the above. Reading premium is one of the best leading indicators of price. It rates as high as the leading indications of price turns on the DOM which come into view 5 ticks off the BBID/BAsk pair. Ir rates with reading pair shifts on the OTR tick charts or reading PRV on volume Gaussians of leading markets of the market where price is traded.
HI 8, there are lots of ways to trade the open but you might have to reinvent yourself by the sound of it. Take a look at tradingtheopen.com. It is years since I learned a thing or two from Ken, and unlike some(one?) on ET who says they can do wonders but won't show it live, Ken blows his own trumpet and then demonstrates live how it is done. In the past he's done quite a few free 2-hr demos so if you register you might get on one if he still offers them. He's a got a huge ego but he produces the goods. A lot of stocks can have 80-90% of their daily move completed in the 1st 10 mins so if your rule is to sit that period out but you had selected a runner, it's annoying to see you were correct but couldn't safely trade it. Hopefully this will help.
Thanks much for the link. Way back in the day when I was a cubicle warrior, I used to trade from work. I would enter near the EOD and close out the next morning, half the gains were in the overnight and half were in the opening noise... now I AM the opening noise
Pleasure 8. Rest assured, there is perfect order in what most see as random noise and digging out the how-to nuggets will also make better sense of the rest of the day. Well worth it.
It depends on what you're expecting. Monday 4/20, a huge correction was predicted, the futures were down big. I sold TNA and URE within the first two minutes. I got lucky I was able to get something (just under $200). The market descended all day. If your gut feeling tells you to buy or sell right away, do it. If there were a terrorist attack on the U.S., God forbid, you'll want to sell in the first minute of trading.