I think about the open with regards to how it balances with 7:30 ct news releases - upcoming 9:00 ct news releases - the very large volume from eurex contracts that have been trading through out the night - the dj pit open since 7:20 ct - the pre-market nasdaq session - company news releases after the prvious close and/or the next morning - etc. And thus, the open can appear so different to traders depending on what they are focusing upon, and thus the confusion at a 8:30 ct bell. In light of this, I would think that the first day session trade should be done in the context of all the existing variables, and thus an anticipation of confusion that would either make it prudent to wait for an amount of time, or trade with a very tight stop and even a willingness to reverse an opening trade. I trade index and bond futures, and normally have a first trade of the day before 8:30 ct. Since I started doing this, I have felt that I was 'tuned-in' better to the open as an extension of the overnight, especially since around 7:15 ct.
That's the way it is. You can reduce your size. One thing that usually works in the first few minutes is to watch CNBC, and if they have a "big mover" get in with a LOO or at the first retracement.
Now we are in the "z" quarter and it is a very profitable one usually. There are several aspects about the open that are very significant and as a consequence the first part of the day can be very rewarding. To handle the open properly you need to know what is going on. Itis always good to read all the posts in a thread like this to determine how people either get in trouble or get the job done. This is a tough one for ETer's and that is unnecessary once a person does some work. Four considerations come up. getting a good clear picture of how the market is going. Es is a good example and you can combine the results of all the market activity as well. I check nine items on the pre open of ES. I also see how far a movement is required to get the DJXX and the indu to be at the proper offset. Friday, for example, it took until 9:43:30 before the transients on this movement settled out. A shift from over 60 points to the current offset was required. At first the cash moved greatly then the index index finished off the job. I check the news coming up as well. Unusually, on Friday the9:45 announcement, was in the picture. After I know what is what, I get ready to choose from the three open options available to me for making money. I always start my first entry on the jelling of the transients. Any onewho watches the market understands that a lot of money will be made on this entry. You get to choose which of the three opportunites that are there for you as you watch the transients leave. For example, on rollover day (Thursday) last week it was a carry over of the prior trend even with the roll over. Wednesday last week started with a nice five trades of 1 1/2 to 2 points each as reversals in a high volatility non trending opening market. More than moderate steady volume kept the reversals just rolling along until the fifth revesal took me into the first morning trend. The third type of entry is the always available remaining one when the first two are absent. That is simply the common high volume trend that immediately emerges when the transients end and the cash market drives the trend. You can see there are few choices (only) and each one is telegraphed to all traders everydaybefore and during open before the opportunity to enter. Anyone who enters during the trnasient period or doesn't know when it is over gets one of two screwings: they get whipped or they chase into a situation that they can't handle and they get stopped out if they have stops or they blow up right off for the day if they have no stops. for the first and last example of the three your C&R stops are for exit. for the second example your stops are reversing stops until the trade breaks out of the initial volatility, then you C&R into an exit stop. All three lead you to the first trend of the day. The trend either goes to S/R or it doesn't make it because the trend is not moving fast enough. You know either way. So at the end of the first trend (when you definitely know it has run its course by your set of signals for that), you change your C&R to a reversal from the exit stop you have in. If you are on S/R because of the strong trend move there, you ride the consolidation on the S or R with scalp like trades until it poops out. If the first trend is slow and doesn't make it to S/R you will see it ending and then reverse into the pullback (retracement of the first trend). Lots of edge traders will be on your case by that time so you will have to just let them get in along side your next run. At this time of the am, you see all the people waltzing into what they now think is safer for trading. It is, of course, easier to make money from this point on in the day because so much is showing up for the taking. That would be OT here. lol. The most helpful thing, I find, for being sure I always enter each day on the right footing is to know whats going on by getting the nine things I check out well understood. Any one who is an edge trader does it differently which is an advantageto me as you see by now. They look for edges and I think they get back doored by what they are not looking for usually (should be watching out for but don't) . Check out the above posts and you can see that they do not even debrief either after they take a hit. Strange indeed.