The open is different for equities and futures indexes. End effects do not affect equites as much as the indexes. This is primarily because of the relationship of the open to the money making trends of equities and indexes. For equities the trends bridge the open because the trend is longer than a day usually. It trend I speak of it the short term trend that has the potential of providing 20% in capital appreciation per cycle. Entry on these trends never occurs at the open when daily end effects occur. the trend beginning, however is usually within 2 hours of the day's beginning. The lowest risk entry occurs after the volume increase has precluded a failure the breakout in price. Four or more capital rotaions can be done a month which will allow extraction of at least 50% of the 20% potentially available. So trading equities does relate tothe open but the "buy" is later and within two hours of open. For indexes the money making trends occur more frequently than daily so the open is "outside" of the trends and is not included in intraday trading. Unfortunately the indexes are value adjusted prior to opens. What adjust at open is the "cash" indexes since, by definition, at this point in the industry, they are off before open and have to "adjust". This fact puts anyone at little advantagewith respect to the open. In comparison, the aspect of economic reports during open hours have greater impacts and thus offer more strategic potential. The preopen periods are also fruitful strategically. Gaps at open are, of course, the focus. to make money at the beginning of the day,it is wise to be cautious to protect capital. After that, the greatest advantage present is the high volume that supports trending. It is difficult, at the open to not make money because you either have a trend after the market synchronizes vis a vis cash and futures or you have an alternative called high volatility stalling. Stalls make more money than trends but both are most appealing. Enter on the first bar extention after the last bar of synchronization. On five minute charts, bar 4 prevails. Continue to stay on the right side of the trade. Use trendlines and analysis of pairs of bars. Adjust as required. Most adjustments involve a coarse adjustment and, if necessary, a fine adjustment. At open, staying on the right side of the trend is awkward if the closing trend of the prior day is not prevailing. When it does not prevail, this does not mean much. It could resume and stiffle the opening trend. The enemy primarily is getting through the noise of edge strategy open players. A great variety of people "see" a great variety of set ups. This causes long bars. The bars line up often. this is the HVS. High Volatility Stall. Non system traders are screwed here. And most system traders are screwed as well. Preserve capital under these circumstances. By using the present bar and comparing it to the prior bar, you have, at all times, a measure of being on the right side of the market. This technique works at all times too. If at times you cannot tell, you are still in the learning phase of trading. This tells you two things. Learn. Note what you do not know. Second, continue to allow trade to go on, but only as long as it is not punishing you for not knowing what is going on. If you are being punished, stop it. If you are not, then allow the trade to continue until you see that you are on the right side of the trade. By not allowing punishment, you keep progressing; as you see the trend you obey it and stay on the right side. Gradually you stay in more and take little punishment. Opening trades link and usually give you the daily range in profits right off from ope to one extreme. Then you turn your efforts to going to the other extreme that is going to appear as it doesevery day. This is in a retace period. You either fully retrace or not. The money you are making slows down considerably as the day procedes. This is normal. There is nothing sudden in the market. Everything evolves. If you are on the right side of a trade, you work to stay there. If you go from knowing you are on the right side to not knowing if you are, you have put a flag up. You are on notice. Either you learn to know or you get punished. It is cheaper to learn while not being punished. there is a time when there is no right side. you are never in the market at that time. If you are, you get to learn when the greatest punishment is handed out. Trading is not rocket science. It starts with the open every day. so do you. Get in and see how much you can learn about staying on the right side of the market. Know or learn. Learn or get punished. Get punished or leave. The target is 3x the H/L every day.
Trading the first 5 minutes is rediculus!!! Ya there are big price swings but you can see them comming and they turn around 2 seconds later. Why risk money like that?? Ya you may win some big money but you may lose some big money as well. That to me is gambling Just wait the first five mins then follow the trend!
Please enlighten me, exactly what makes the number 6 magic and 1,2,3,4,5, so "rediculus!!!"?? thank you sulong
Worked agin, first try. NQ +4 pts sulong Bracket order sent at 6:32:01 buy 1381.5 sell 1376.5 6:39:52 short, 6:44:05 target reached
I know a trader that uses the first 10 seconds!! LOL. The only way to know if it works it to _know_. Test it by computer and let the puppy loose on the ES/NQ if it is mean positive. The hard part of testing it is that retail testing tools cannot handle massive amounts of tick data in realtime very well. nitro
The thing I've learned is, any strategy will test out great, and work, as long as what ever strategy that is being tested or employed, is done so in a market environment that is condusive to making that particular strategy work. So for testing and study purpose's, I think traders will be way ahead of the game by studying the market action just "prior" to the preferred market environment for what ever strategy a trader wants to employ. There's no use using a break out strategy in a NON trending market, or a SAR strategy in a STRONG trending market. ( Or even testing them in such. )
You are so right. However, IMHO, what you are proposing is a panacea at best, and probably IMPOSSIBLE. nitro