Trading off of the FIRST FIVE MINUTE BAR?!?! Newbie Trader Question

Discussion in 'Technical Analysis' started by brothertruffle, Mar 2, 2013.

  1. I heard some people call opening trading "Amateur Hour" Is this true?
    I also read a strategy that you buy a breakout/sell a breakdown of the first five minute bar (es, nq, ym, etc.)
    I'm getting contrary data on trading during the opening. Can someone enlighten me with data, links, book references, famous traders who are good at trading the opening, etc.
  2. drm7


    NoDoji has a method of trading the 9:00-9:05 bar on CL that she's been pretty open about.

    I've found that trading the opening bar based on a breakout of the pre-opening bar on CL (i.e. trade the bar opening at 9:00 based on the breakout of the bar ending 8:59) looks pretty good for a scalp (10-20 ticks). Not 100% winners, but nothing gives you 100% winners.

    As far as trading the opening RANGE, the ACD thread is the place to be on ET. (Or read the Logical Trader, by Marc Fisher.)

    there is no real systematic "edge" to purely trading the open range as a pure strategy itself: if there was even the slightest, every algo out there would have pummeled it to submission long before now.

    but there is useful information to be gleaned from a basis of the open range. TraderKingdom webinar from last year explains.
  4. RTH margin controls how the intraday trading works.

    Anyone can do what they want.

    Since I stay in the market all day, I have to know in advance how to get in during the first 12 to 30 seconds of the first bar.

    My orientation is not helpful to traders who enter/exit and think in up/down terms.

    For anyone who takes the full offer of the market segment by segment, he has to know where the open is occurring in the continuing order of events of the trend that was in process as the RTH margin was terminated.

    If you use entry/exit you probably are on the sideleines most of the time. So view the open from the sidelines and just watch until your mind settles down and you have less fear, anxiety and anger welling up from your confusion.

    Some people suggest that you have to know what you are doing. Since you don't, only get in the markets for brief periods when you do know something.

    I suppose you are interested in thinking. PositScience has a Brain Fitness Program. For your convenience you can check in by calling 1 866 599 6463.
  5. I tried testing an idea for it on CL 5 minute bars

    breaks of the opening bar

    Nodoji told Surf it was an ATM machine

    so I figured I'd try it out

    I tested 3 months of charts, manually by hand

    came out profitable on paper

    from memory it was 20-something ticks profit for 3 months

    and then you have to factor in commissions

    also cl is a thin market with slippage

    so cant scale up the size

    and I wonder if slippage on those bar breakouts would erode the profit--- who knows?

    In any event I did not pursue the idea because there didnt seem enough money in it. Maybe someone else can come up with better limiting criteria and make it work, but I didn't think it was worth it for me. Plus, I discovered I really do not enjoy any kind of scalping.

    he had a book that sold for like $5,000 madness. You should look at the stats. I would say there is a higher chance that price breaks down/ up then reverts to an opening print. So you could draw a line at the five minute close then see if price reverts. I not you have a trend day. If one could isolate the trend days in advance you would be very wealthy. Market profile speaks to this as well. A trend day in market profile is when price goes vertical in either direction.

  8. I could be wrong, but I believe it's referred to this because amateur traders trade the most during this time...and most likely get taken to the woodshed....presumably buying
  9. don't really see where you are getting a thin mkt from in CL - it is one of the most liquid commodities. i mean if you try to move 500 cars at 2 am est i could see there being a prob.

    re the slippage on breakouts i'll give you that b/c by def on a breakout the mkt is moving fast and that's when you're most likely to get slippage. one way you can try to reduce this is to just enter a limit order for the current ask or one tick above it so at least you're not gonna get some ridiculous print. yes i know you risk missing the move entirely but there's always a trade off.
  10. well that's what I mean by thin....... referring to breakouts

    it skips a few cents or more on many of them and I think that might ruin the results if I tried to trade it in a live market

    but by then I had already discovered that I hate scalping

    I think I have too much ADD to be a scalper.............
    #10     Mar 2, 2013