Hi....i'm a fairly new trader (been trading about a month and half or two) I do pretty well recognizing patterns during the day (that is most of the time after 10:00 EST or so) but how to buy on the open is beyond me. I am constantly watching as the markets morning move just doesn't run out of gas and I'm stuck on the sidelines waiting for a bull flag a triangle anything. I've been to several chat rooms where people are popping off trades starting at 9:30 on the dot! I can recognize patterns intraday, but what patterns you guys are looking at in the morning (i'm guessing there really aren't many) are beyond me. I'm not asking for your bread and butter strategies...just if you'd point me in the right direction or tell me what i should do differently...I'd really appreciate it. THANKS!!!
hi harry.. the strategies for nyse and nasdaq are a bit different.. for nasdaq, you can watch the sizes on your level 1 screen.. market participants usually show their true size at the open so you can try to game the momo, but you gotta be fast.. a safer way to trade the open is to let the stock establish a range for the first 5 minuites.. then trade in the direction of the range break.. for nyse, there are strategies for buying stocks being opened too low/high compared to their normal relative position to the futures.. don bright has a thread describing this type of trade.. just do a search for open strategies.. since you are new to trading, i recommend you dont trade the open.. sit on the sideline and go for easier kills.. things move very fast at the open and just one second of hesitation can cost you hundreds.. good luck =) -qwik
Pretty much agree with Qwick. Just avoid the first hour for now all together. The rest of the day may not be as sexy, but it's a lot more consistant.
Hi Harry, First, welcome to the club ! Second, stay away from opening trades, 3 to 6 months, until you get the feeling ! You should know that in jungle of Newbies Eaters, if you do not stay away from the open, you can say good bye to your capital !!! What I found out for newbies is the Strategy of Ken Calhoun, at "daytrading-university.com ". He worships with success, the 2 day strategies that include the opening and also, his technique of alerts is pretty easy to get around ! I would like, you to know I do not get anything for telling you this, except the inner feeling of sharing satisfaction !!! Take it easy fella, and do not forget the sole thing that it counts in trading : synchronism of your Trading Curve Level with your Trading !!! Don't jump the horse, it will kick your teeth out of your... Have a good trading, and happy holidays !!! MD-DOC
harry, this is not some state secret. specialists on nyse will gap a stock to a level that they think will attract action in the opposite direction, ie up gap to a level that will generate sellers. They short to the open buyers and cover when it fills the gap. Same thing happens on Nasdaq but little more unpredictable . The trade is tough to take as you are going against the market direction but that's what makes it good. Just be sure you bail out quick if it goes against you and take profits on first move.
We encourage all new traders and all those who are struggling to do Opening ONly orders based on fair value calculations every single day. This basically finances their learning curve. Most of the money made by all traders is made during the first hour (and the last hour). Mid day trading is when you really have problems, and should only stick to pairs trading or other sytematic approaches since the momentum is deceiving. Sorry to disagree with some of our esteemed collegues here, but I thought you might want to hear the facts from our end. The "schools" who teach people to wait for an hour are (generally) taught by people who have never been on a trading floor, and without that experience or training, perhaps they should stay out....but with some simple guidelines the openings are very fruitful. This is the one case where you can only trade listed since there is no "opening" on the NAZ.
I have no idea of what these open only trades with fair value exactly are. It sounds complicated. I daytraded stocks for a while now eminis, there are many chart patterns in the first 30 min of trading. Just go to lower time frames, watch multi day charts and watch one min chart of the futures. Some patterns are specific to the open you recognize them with experience others are just usual stuff on a micro time frame I would say, it's all about the high low and yesterday close. Know the reversal times. It can be very fast before 9:45, 10-10:15 is usually a better time to trade if you are not confident in the first 20 min. But the first hour and a half is the best time to trade, you don't see many afternoon breakouts any more. And I think it's better to enter shorts in the morning. So I think trading after 11:00 is not safer.
Since we are members of the CME as well as equity exchanges, we are pretty well versed on the trading of futures as well. We still find the trading near the opening to be the most profitable. BTW, nothing complicated...seriously, "trading is a simple as you'll let it be, or as complicated as you want to make it"...don't get bogged down with the intraday chart patterns, see about reading the markets via the tape and primary indicators (kind of like driving a car).
Don, you know better I am sure, but I believe the strategies you guys use at the open are mainly for listed stocks. If you don't trust chart patterns nor the MM's on L2 how do you or your OTC traders trade Naz stocks then? Just from the tape? I don't trust the tape with Naz stocks plus I believe trades are often not reported in time by the MM's.
(I need to be cautious with this answer).. Most of our traders do trade listed stocks. The NAZ traders that we have are mostly ex MM's themselves and actually do a form of tape reading combined with order flow activity. I still wonder why there is so much emphasis on NAZ trading when there are much easier ways to make money on the listed (I usually get flack for saying that, but still have not been shown any evidence to the contrary). But, as an "old dog" I am waiting to learn "new tricks"...