How to trade market open for e-minis

Discussion in 'Index Futures' started by enlightedtrader, Oct 21, 2006.

  1. Probably market open trading is the most challenging and reward part of index future day trading. You look at these days quite often ER2 have a strong move in the open. However I'm hestiating to take any trades since I don't have good clues or set-ups to deal with market open.

    How do you guys think? Do you usually trade market open? If so, what's your method/approach?
  2. for a scalper, it is worthless........for a position trader it is interesting........but it is no more or even as valuable for pts as rest of day......will whip most all who play with it, in the end.......
  3. Surely your not asking anybody here to reveal the specifics of their profitable method or approach to you that involves trading ER2 in the first hour of trading???

    With that said, I'm going to assume your looking for general advice.

    ER2 reacts strongly to any information shown at the below links on the day those particular key market events occurs (usually within a 15min window - before - at - after).

    Schedule of the North American Key Market Events that have impact on the price action of the Eminis

    Schedule of Europe Key Market Events that have impact on the price action of the Eminis

    FED Speech Calendar

    European Central Bank (ECB) Speech Calendar

    Here are additional clues, without going into any details:

    * Learn about Volatility Analysis.

    If to stay away from ER2 or trading instruments like EuroFX EC futures.

    Wide Range Bodies or WRB's (more often than not) represents expanding volatility while small bodies (more often than not) represents declining volatility.

    * A particular time of the year when Oil is doing something in particular...

    The price action of Oil will give strong clues to key turning points in ER2.

    It's an edge for a few months and has been occurring every year since the birth of ER2.

    * At particular times of the year...ER2 moves strongly in one particular direction that last several trading days.

    These are market seasonal patterns and has been occurring every year since ER2 birth.

    * Learn all you can about ER2 volatility index (RVX.X) because it will help you stay in a trade much longer beyond your profit targets especially if your trading some size (exit some contracts at your first profit target and then leave some remainders to milk the cow)...

    Suitable for those that scale out of their position.

    * Don't get greedy when your only trading one contract or exit all your contracts at the same time...

    For those that don't scale out.

    Simply, take the profit when your profit targets are reached because ER2 will reverse suddenly with very little warning (unless you knew about the above clues) and your going to need fighter jet pilot like skills to react in preventing your position from becoming a loser when it had just been very profitable a few minutes or seconds earlier.

    In other words, don't enter the train if you don't know your destination.

    * Those quick sudden trend reversals in ER2 are occurring for a particular reason...

    Almost the same reason every trading day.

    That's it, figure out the above and you'll be able to trade ER2 profitably and consistently the first hour of the trading day.

    (a.k.a. NihabaAshi) Japanese Candlestick term
  4. i don`t trade the first 1/2 hour or the last 1/2 hour.......the open between 9:30 & 10 is probably the most unpredictable time of the day so why skew the odds against far as the last 1/2 hour`s pretty easy to give back an entire day in that time frame.
  5. giving back the day's pa ycheck is not easy to do if stops and trade management is in place at end just like the beginning. the above by nihabaashi applies to all eminis.....bottom line if u r intraday emini trader it is dangerous for your pocketbook..........
  6. BCE


    Really. Everyone seems to be looking for a free ride here.
  7. MrPaul


    Yes I do trade the market open at times. As far as my method/approach it is really quite simple. Buy when I get a buy signal, and sell when I get a sell signal....
  8. If the S&P futures gap up or gap down 4 pts or more, you can usually scalp a quick point or two on the ER2 in the first five minutes.
  9. i like to buy when it goes down and sell when it goes up

  10. Mark,

    Thanks for your insightful input. Definitely I need to study more on this subject if I want to trade market open profitably, especially for ER2.

    I've made the following observations on ER2 open:

    The prices during the first five minutes are quite noise and it is hard to see any trend. After 5 minutes, the noise gets smaller and you can sense the emerging of a trend. At 10 minutes, the picture is more clear and defined and it is possible to enter a trade at this time.

    I want to mention the above pattern appears in quite high probability during the past months I've been observing. Of course if there is a big gap open the story can be quite different.

    What's your comment on my observation?

    BTW, I'm not a scalper so I'm not interesting in scalping for ticks. Basically I'm an intrady swing trader working on 5-minute candel-stick charts. At current stage for my observation of market open, I use 1-minute chart to get a more detailed picture even though most of the time I don't take a trade usually after 30-min of open.
    #10     Oct 21, 2006