Morning Breakout Options Strategy

R

rajesheck

This strategy works best when
1. Traded on multi-sector Index like Nasdaq, FTSE100, etc, (not suitable for single-sector Index like Bank, IT, etc.,)
2. Traded on first breakout in the morning
3. Avoided trading last 3 trading days before contract expiry date

THE STRATEGY :
(5 minutes candle chart)

Half signal (breakout) : A morning breakout between 0.20% and 0.25%

Full signal (gentle resistance & support) : After a mild resistance price gets support between 0.10% and 0.20%

Bullish Entry : Bullish Crossover at 0.20%
Target : 0.35% TO 0.40%

Bearish Entry : Bearish Crossover at 0.20%
Target : 0.35% to 0.40%

Stoploss/exit : Price breakout is nullified/neutralised.

IMPORTANT NOTE : All the percentages (%) are referred from "closing price" of the first candle of the day with high-low<=X points (0.08%). This technique is for morning intraday noise removal AND to identify refined "Open" for intraday.

Feel free to paper trade using this strategy on your favorite Multi-Sector Index for ONE WEEK and share your experience.

All The Very Best !
 
Last edited:
rajesheck said:
This strategy works best when
1. Traded on multi-sector Index like Nasdaq, FTSE100, etc, (not suitable for single-sector Index like Bank, IT, etc.,)
2. Traded on first breakout in the morning
3. Avoided trading last 3 trading days before contract expiry date

THE STRATEGY :
(5 minutes candle chart)

Half signal (breakout) : A morning breakout between 0.20% and 0.25%

Full signal (gentle resistance & support) : After a mild resistance price gets support between 0.10% and 0.20%

Bullish Entry : Bullish Crossover at 0.20%
Target : 0.35% TO 0.40%

Bearish Entry : Bearish Crossover at 0.20%
Target : 0.35% to 0.40%

Stoploss/exit : Price breakout is nullified/neutralised.

IMPORTANT NOTE : All the percentages (%) are referred from "closing price" of the first candle of the day with high-low<=X points (0.8%). This technique is for morning intraday noise removal AND to identify refined "Open" for intraday.

Feel free to paper trade using this strategy on your favorite Multi-Sector Index for ONE WEEK and share your experience.

All The Very Best !
More...
 
ETcallhome said:
Stoploss/exit : Price breakout is nullified/neutralised.

How do you know when breakout is nullified/neutralised?
More...

"Breakout Nullified/neutralised" means price touches/crosses "closing price" of the first candle of the day with high-low<=X points (0.08%).
 
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ETcallhome said:
Why .08%?
More...

This is a micro-trend-trading technique. The %s are fixed proportionately to suit micro-trend.

The 0.08% is independent of any strategy and appropriate for filtering the intraday noises when market open period of an Index and arriving at refined "Open" price.
 
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ETcallhome said:
why 8? why not 7 or 9?
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Please note : I have edited my previous message.

Its fixed based on common sense and experience. No science behind it :)

More importantly trading is more of an art and less of science. Its an art of business psychology!

Thats why plain algo strategies are not performing well :)

Because they have two classic problems:
1. Algos are mostly based on statistical instruments like ema, macd, etc., which are basically "averages" based and inaccurate
2. People develop algos without considering trading psychology
 
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rajesheck said:
...

Because they have two classic problems:
1. Algos are mostly based on statistical instruments like ema, macd, etc., which are basically "averages" based and inaccurate
2. People develop algos without considering trading psychology
More...

Actually entire bar chart represents emotions to a degree, and apply TA or support/resistance is getting all the tech from the chart itself. So to say algos have no trading psychology is wrong to me. It takes much time to program what you want to happen, but just about anything you can dream up, eventually you can program it.
 
Handle123 said:
Actually entire bar chart represents emotions to a degree, and apply TA or support/resistance is getting all the tech from the chart itself. So to say algos have no trading psychology is wrong to me. It takes much time to program what you want to happen, but just about anything you can dream up, eventually you can program it.
More...
Maybe yes, chart pattern in the market figure out psychoogy market itself, which it's like as market behaviour which happened because difference demand and supply in the market, as trader seems still use support and resisten to analyze the market also out their stop loss and target
 
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