Some years ago, I tried trading ES at the open. The results were less than pretty, so I have avoided it ever since. However, I get wistful whenever I notice the considerable movement that regularly occurs almost immediately after the open. And so, I'm curious to know how many of the folks here trade within the first few minutes of the open. Naturally, I'm also curious if you do it well.
Do you trade index futures at the open?
- Thread starter Thunderdog
- Start date
I agree for the most part, particularly since I am fairly risk averse. However, ES's chart for the last few months has suggested otherwise. Even so, I am reluctant to give it a try again because I am reminded of my past swan dives into the drained pool. Let me ask you another question. How long into the trading day do you usually wait for your first suitable setup? Presently, I tend to ignore the first 40 minutes or so. But I continue to gaze longingly at the green pasture across the fence.
If anything, you might want to try the premarket at about 8AM EST. When the reports come out, a strangle works well.
Generally, I will wait until a trend has been established, which means after 10am. But recently I've been fading the pre 11am range expansion.
Example, I placed a short order @719 at 10:15am for the ER. It was the 1st resistance point. Market was surging at the time and I felt if it reach that high, it was a good fade point. It was.
Generally, I will wait until a trend has been established, which means after 10am. But recently I've been fading the pre 11am range expansion.
Example, I placed a short order @719 at 10:15am for the ER. It was the 1st resistance point. Market was surging at the time and I felt if it reach that high, it was a good fade point. It was.
Alan Farley wrote: "They see you coming."
I only do when trading gaps or on certain eco reports. Usually I sit tight for the first 30 minutes and will start looking to initiate a trade at around 10 for a 10:30 reversal trade.
I think the first 30 minutes are the hardest time of the day to trade. I feel that the order flow during this period tends to disguise the direction for the day, as this is the period in which the greatest number of amateurs and non-professionals tend to take care of their business for the day. Their activity clouds the intentions of the professionals, imho.
I typically will not look to be active until this period has ended.
I have found that although I may miss out on the trade of the day by not entering within this period, the number of losses and whipsaws that I am able to avoid far outweighs the occasional big trade.
I typically will not look to be active until this period has ended.
I have found that although I may miss out on the trade of the day by not entering within this period, the number of losses and whipsaws that I am able to avoid far outweighs the occasional big trade.
Couple of things before I hit the rack
First, the open is the most important part of the day. Your best profit opportunity is trading the open. Trading the open requires discipline and planning. It also requires a good (accurate) conceptual understanding of the market. Retail traders do not generally have it, so they either try it a couple of times and get burned, or they just watch hoping to make it up during the balance of the day. The open and the close are generally dominated by professional participants.
In order to learn to trade the open, you have to pay your dues. The first thing you have to do is select your market. I like the Russell and the Spoos. Then you have to study the open. One good way to do this is to use Excel. Simply divide the open into time periods (5 mins is my preference). On an Excel spreadsheet, put in 12 bins. Each bin = one 5min bar or candle. What you want to do is to keep track of the size of each move from the open until the first hour is up. If you do this, you will see (eventually) that the open is composed of several "moves". You will also see that these moves happen during specific time periods. At some point you will start to see patterns that repeat. Complete the picture by puting in some pivots (start with daily pivots, then add the weekly and monthly). If you keep going you will start to see that the open is a series of "tests". Price will test not only the pivots, but yesterdays open, close, high and low. Ultimately your success depends on your powers of observation.
Good luck,
Steve
First, the open is the most important part of the day. Your best profit opportunity is trading the open. Trading the open requires discipline and planning. It also requires a good (accurate) conceptual understanding of the market. Retail traders do not generally have it, so they either try it a couple of times and get burned, or they just watch hoping to make it up during the balance of the day. The open and the close are generally dominated by professional participants.
In order to learn to trade the open, you have to pay your dues. The first thing you have to do is select your market. I like the Russell and the Spoos. Then you have to study the open. One good way to do this is to use Excel. Simply divide the open into time periods (5 mins is my preference). On an Excel spreadsheet, put in 12 bins. Each bin = one 5min bar or candle. What you want to do is to keep track of the size of each move from the open until the first hour is up. If you do this, you will see (eventually) that the open is composed of several "moves". You will also see that these moves happen during specific time periods. At some point you will start to see patterns that repeat. Complete the picture by puting in some pivots (start with daily pivots, then add the weekly and monthly). If you keep going you will start to see that the open is a series of "tests". Price will test not only the pivots, but yesterdays open, close, high and low. Ultimately your success depends on your powers of observation.
Good luck,
Steve