Trading the Market Opening

[olmoelisa 10]

Hi, I'd like to find a tutorial about trading the market openings.

It's OK an online tutorial, a book, an ebook, everything...

Till now I've only found two ebooks by W. Miller, one is "Secret Stock Trading Indicator - Trading on Market Opening ", the other has a similar title something like trading around the market opening, both are very expensive and I'm not sure if they are good or not.

 

Any suggestion is welcome

 

thank you Sandra

[Tams 20]

For those using TradeStation, MultiCharts, or any other Easylanguage programs,

here is an opening indicator for your perusal

 

Half Gap

 

http://www.traderslaboratory.com/forums/f46/half-gap-7738.html

go to post #12 to get the latest version of this indicator.

 

72.42.23

[TraderWill 11]

Hi Sandra,

 

If you've traded before you can probably do a web search to come up with a few suggestions. Fading the opening gap is a popular technique that is based on the belief that most opening gaps will be filled, but I don't personally know the specific rules on how to do it. If you haven't traded before then you'll want to get some general background on technical analysis, which you can probably get by reading a few books from your local library or bookstore. Any market open strategies will make more sense to you if you have the technical analysis background.

 

Good luck

[sdoma 10]

Before you trade gaps, you need to do your homework. Record if they fill and how long they take. Simply knowing a gap fills X% of the time won't help your account. Many fill in the days after, or after significant price movements in the opposite direction. Also, this trade changes subtly over time, as do they all. Beware of large gaps and volatile markets, as gaps tend to fill less given those conditions.

 

I will write more on this later, but you are best served understanding the key reference points in play close to the opening price, especially the highs and lows of the previous overnight session and day before that. Oftentimes, if you are close to an overnight high or low it will be tested to see what order flow lies in wait there. I like to play rejections from those extremes back to the overnight midpoint. If you use market profile, understanding where you open in relation to the value of the last 3-5 days (composite) can help as well.

[renvik 10]

Hi Sandra,

Do you trade equities or futures - there is a difference?

 

Kumar

[sdoma 10]

Identifying levels: Overnight high, low, and midpoint.

 

Below I've attached charts of the last three days' trading with the overnight high, low, and midpoint marked out in red, green, and blue respectively. I use a box to show you where the market opened, and a green vertical line to denote the end of the first hour's trade. A few observations you could make based on these charts:

 

1. Market participants like to test one of these established extremes in the first hour.

 

2. It is difficult to play these extremes as fades without additional information.

 

3. The midpoint acts as an important pivot.

 

4. If prices auction to or beyond the overnight high or low and are rejected, the midpoint makes a nice target for your trade.

 

I'm not giving you a "if A, then B" type of scenario here. This is all context dependent and uncertain at the time of execution. Welcome to the market. If you want to learn more, let me know and I'll post more.

[Trendup_ 10]

Identifying levels: Overnight high, low,

 

Fib lines on these reference points seem to give good sup/res.

[sdoma 10]

Fib lines on these reference points seem to give good sup/res.

 

How would you trade them? Looking at a level in hindsight and saying "good sup/res" is all well and good, but how would you use them to make money? Blindly fade every level? What are your targets and stops in that case?