A Basic Trading Strategy for Trading the Open

 

Trading the Open : The Strategy for Buying

Gap Up Long Before You Start: Remember: A larger gap has less of a chance of filling completely, and I think these can be the toughest to trade. Wait 10 - 15 minutes after the open, and watch for pullbacks. If there isn’t a pullback, then use the 1st bar/candle low as your stop. If that is too far for your money management rules, use a money stop. Look at This Example Again: In this Gap Up Long, the ES never tested the low or the opening price. Because of that, the ES was net positive all day long.

Gap Down Long After waiting 10 - 15 minutes to let overnight orders get filled, take the entry on a price cross back above the opening price with TICK confirmation. Look at This Example Again: In this example, the ES gapped down at the open. It then tested a pivot line (S1) and retraced back to the opening price. The entry was taken above the trigger bar when it was confirmed by TICK strength. The stop was 2 points, for a good reward/risk potential. As you can see, the initial entry was stopped out. But, patience and persistence paid off and, after the price tested S1 and held again, a 2nd entry was taken and paid off nicely. Additional positions could have been taken on the 5/15 MA cross and on the price cross above the prior session’s close. download /A_Basic_Trading_Strategy_for_trading the open