[es] Trading E-mini at the Opening Bell

[TRADEZILLA 10]

I mainly trade the e-mini after 11am/pt or 2pm/et and found that to be a better time fir directional moves.

 

I've just started trading the mornings as well and found it more difficult but have been having some success trading in the direction of the opening bias and then reverse on the 1'st fade usually around 15 minute after the opening or so. I only do it on 1 contract but it has been working so far.. Am I approaching it correctly?

 

Has anyone here been consistently success trading the opening bell? IF so, I'd like to hear about your approach to the opening bell..

 

Much thanks,

Tradezilla

[TheNegotiator 13]

I find that you really have to have a plan given the phase of the overall short term auction. If you try to trade the open in the same way every day without giving thought to the auction, you'll likely get nailed before the day even starts properly. Today for example in the ES, you might have thought that it'd be a great buy considering the 'strength' over the last couple of days. However, given that it was at the top of short term balance and uncertainties remain, the trade was to sell to value. It's not always as simple as following the stronger type of participant though. Much of the time, you do get two-way action on open and waiting for the first push would get you caught in the move back. So my answer is that it depends on the day. I think trade it if you see some good opportunities if not don't. The other thing is that certain reference prices tend to work better than others depending on the participants present. OTF as longer term participants are referred to sometimes generally don't care too much about price, so if you can spot that type of action early on, going with it is not a bad idea.

[TRADEZILLA 10]

I don't only trade like that only of course. I prepare with

 

market internals the night before

30min chart evaluation

S/R lines including pre-market where I decide my trades/stops

Pre-market chart pattern

Opening tones & etc..

 

I then put it all together and decide to trade or not.. My method has been working thus far but I don't want to get too happy before a major loss, since the run time is so short but it has def got me interested in some morning methods..

 

I'd like to hear from other traders that has been consistently profitable playing the morning moves..

 

Much thanks,

Tradezilla

[Tradewinds 12]

It is impossible to know what is in the collective minds of all the traders and investors and what they are going to do. All you can do is look for signs of what the majority is doing. About the only sure thing you can count on, is that the price will probably slow down and get choppy a few minutes before the news release. And there will be a lot of volatility the second the news comes out. I don't try to guess what the news report will do to the market. Just be aware when the news releases are coming out, and go with the flow.

[TRADEZILLA 10]

The market is one big guessing game and we all do our best and have reasons why we guess the way we do..

 

What types of indications do you use to clue you in for your morning trades?

 

In the past, I've always stayed away from the mornings because it is so volatile but I know somebody is capitalizing on that volatility.. and if you know how not just in theory but have been consistent at it, I'd like to know.. In return, I can share my method how I scalp the ES.. Scalping is a lot of hard work but the R/R decent and the overall net result is good..

[TRADEZILLA 10]

This morning was a very tricky trade. The pre-opening looked like the market wants to go lower then on a dime exploded to the upside.. The only thing that clued us in was the pre-market support zone.. Did anyone catch that move?

 

I missed the move down and up but did catch the 2 shorts of the day at 7:30am&9:45am PT for a 4 1/2/2 point move today for a total of 6 1/2. I normally would not have taken those shorts but my internal indicators showed a reversal..

 

I'm curious to hear from anyone that caught that move up because you are either have balls of steel or an incredible methodology.. Anyone care to offer their input?

[phantom 16]

This morning was a very tricky trade. The pre-opening looked like the market wants to go lower then on a dime exploded to the upside.. The only thing that clued us in was the pre-market support zone.. Did anyone catch that move?

 

I missed the move down and up but did catch the 2 shorts of the day at 7:30am&9:45am PT for a 4 1/2/2 point move today for a total of 6 1/2. I normally would not have taken those shorts but my internal indicators showed a reversal..

 

I'm curious to hear from anyone that caught that move up because you are either have balls of steel or an incredible methodology.. Anyone care to offer their input?

 

I assume you are talking about the emini SP? The upside move began just prior to 5 am MDT according to the 2 minute chart I'm looking at, and it rose fairly gradually until 0830 am. Plenty of time to get in on that move...

 

Are we on the same page here?

 

Phantom

[TRADEZILLA 10]

Phantom,

You're absolutely right.. That move began much earlier than the open with a nice set up in the pre-market. If you missed that move in the pre-market, how would anyone know to take that trade at the opening bell? since the pre market has low volumes and the opening bell has much higher volumes.. The only thing I see is the trend line that extended from pre-market but that would still be a gutsy move. I don't see how a trader would see a confirmation in time to see that trade, though spectacular...

[TRADEZILLA 10]

A flag is forming right now that will likely have an impact on the after market.. so I imagine tomorrow should have another nice move at the opening bell..

[phantom 16]

Phantom,

You're absolutely right.. That move began much earlier than the open with a nice set up in the pre-market. If you missed that move in the pre-market, how would anyone know to take that trade at the opening bell? since the pre market has low volumes and the opening bell has much higher volumes.. The only thing I see is the trend line that extended from pre-market but that would still be a gutsy move. I don't see how a trader would see a confirmation in time to see that trade, though spectacular...

 

If you wait until the opening bell in this market, you are making a big mistake. The REAL trading day in ES begins no later than 0600, and probably closer to 0530 MDT.

 

 

Phantom

[TRADEZILLA 10]

Yesterday's close and the trend line I suppose is probably good enough to take trade with a stop 2 points below.. The R/R ratio was worth it if someone planned that trade in advance.. I think these morning trades and price extreme extensions are the best trades the SP futures offer.. for R/R, though on the extreme trade, I prefer to take my profits early..

[horace 10]

Phantom,

You're absolutely right.. That move began much earlier than the open with a nice set up in the pre-market. If you missed that move in the pre-market, how would anyone know to take that trade at the opening bell? since the pre market has low volumes and the opening bell has much higher volumes.. The only thing I see is the trend line that extended from pre-market but that would still be a gutsy move. I don't see how a trader would see a confirmation in time to see that trade, though spectacular...

 

Hi Trade,

 

Have you tried CVB [constant volume bars] They build the changing rate of volume levels into the bars enabling you to see the action much more clearly.

 

Couple this with major S&R lines and you will see the pullbacks around the RTH Open that are Suckers Bait for the unaware.

 

Finally, put the notion that trading the Open is difficult.

It is not, it just requires a different approach in that one day it is pure momentum and the next day it is linear.

 

Using CVBs and major S&R lines plus paying attention to the buildup in the pre-market will enable you to pull good money from the Open.

[TRADEZILLA 10]

Yes, perhaps but I wouldn't stand in the way of the opening bell volumes though. I've placed trades in the pre-market before the opening bell if I think it clues me in to the opening and so far it has worked but I was biting my nails.. but I don't think today is one of those days.. I think you would just have to know the S/R levels and just take your shot at those levels and know your stops.. That's the only way I know how to do it, but that method seems to have good R/R, and more often than not, worthwhile trades..

[TRADEZILLA 10]

Hi Horace,

I have not. I didn't think volume was actionable info at the opening bell because all the volume is just coming in and can change quickly during the volatility, but I'll look into it.. So far, major S/R and pre-market indications is all I look at.. Can you give me an example of how those volume bars helped you with your decision?

[phantom 16]

I'll only say it one more time, TRADEZILLA. If you are waiting for the 0830 opening, you're leaving A LOT of money on the table...

 

How do you expect to make any money off the 0730 report releases, ie trade balance, nonfarm payrolls, initial claims, etc.???

 

To each, his own, I guess...

 

 

Phantom

[TRADEZILLA 10]

Phantom,

Are you suggesting that

- I should always first look for opportunities to position my trades prior to the opening? or

- I should be trading this market in the pre-market hours where opportunities are better?

Tradezilla

[horace 10]

Yes, perhaps but I wouldn't stand in the way of the opening bell volumes though. I've placed trades in the pre-market before the opening bell if I think it clues me in to the opening and so far it has worked but I was biting my nails.. but I don't think today is one of those days.. I think you would just have to know the S/R levels and just take your shot at those levels and know your stops.. That's the only way I know how to do it, but that method seems to have good R/R, and more often than not, worthwhile trades..

 

Well this morning kicked off around 06:30, run into the 29.75 line and reversed and then reversed again at the 27.75 which was built into a very strong line.

 

It is a common enough pattern where the price struggles through the first line [27.75], turns at the second line [29.75] which then rolls the first 27.75 line from Resistance into Support.

 

basically it is a"shake-out" play followed by a big RR play

[TRADEZILLA 10]

Horace,

So the constant volume bars helped you see those levels? Did you take that ride up? If you did, how did you make that decision other than knowing that level was yesterday's close and a trendline? I imagine volume signals can be easily manipulated at the opening from bigger players to mislead.. How helpful do you consider those volume bars with your morning decision? I imagine the strength of the S/R levels along with morning sentiments that will determine most of the decision of the morning trade.

Tradezilla

[TRADEZILLA 10]

as well as pre market patterns most days

[phantom 16]

Phantom,

Are you suggesting that

- I should always first look for opportunities to position my trades prior to the opening? or

- I should be trading this market in the pre-market hours where opportunities are better?

Tradezilla

 

Pre-market hours???

 

This market trades 23.75 hours a day Tradezilla. Just because the floor doesn't begin until 0830 shouldn't preclude you from making money before they begin. I've made TONS of money on moves that began and ended long before the first floor trader stepped into the pit.

 

Also, how does a floor trader hunt your stop if he's not even at work yet?

 

You need to broaden your perspective on how the markets work if you ever want to go full time in this industry, in my opinion.

 

Not only is the ES "opening bell" NOT the end all-be all, you'll get MUCH more bang for your buck trading the grain markets' opening bell at 0930. I kid you not!

 

Anyway, go back in your charts and look at moves that started between 0700 and 0800 CDT; see if you can find some breakout opportunities off 15/30 minute charts, just like we've been discussing in the EC market. You'll be surprised.

 

 

Phantom

[horace 10]

Horace,

So the constant volume bars helped you see those levels? Did you take that ride up? If you did, how did you make that decision other than knowing that level was yesterday's close and a trendline? I imagine volume signals can be easily manipulated at the opening from bigger players to mislead.. How helpful do you consider those volume bars with your morning decision? I imagine the strength of the S/R levels along with morning sentiments that will determine most of the decision of the morning trade.

Tradezilla

 

The best thing you can do is try these things for yourself.

 

When looking at S&R you might try the CLOSE rather than the H/L to set your levels.

Also take a look at the reliability of price Turning Points in the glbx as compared to RTH

and see whether you think the glbx is more directional or less directional or just about the same.

[TRADEZILLA 10]

I see those moves, though it often provides good moves, it often goes through slow directionless moves with very low volumes.. I suppose its following the foreign markets most of the time. You could be waiting a long time for 3-4 points whereas at the opening bell, you got a +3/2 reward/risk potential as long as you fin the right levels and your stops don't get hit more than twice..

 

I'll check it out but I will have to change my sleep schedule trading the evening currencies and the pre-NY opening..ha,

[phantom 16]

I see those moves, though it often provides good moves, it often goes through slow directionless moves with very low volumes.. I suppose its following the foreign markets most of the time. You could be waiting a long time for 3-4 points whereas at the opening bell, you got a +3/2 reward/risk potential as long as you fin the right levels and your stops don't get hit more than twice..

 

I'll check it out but I will have to change my sleep schedule trading the evening currencies and the pre-NY opening..ha,

 

3-4 points is a day's pay to a lot of folks. But if you only trade report days, you're much more likely to catch a larger move...

 

 

Phantom

[TRADEZILLA 10]

Horace,

I've been watching those levels and I think they're both reliable more often than not. The rest depends on other factors such as the way the price is responding to those levels in context with the larger times frame and the tone of the day... all other indicators I've looked at are usually late. I've been trying with just one contract and I like what I see so far.

 

Phantom,

I'll definitely check out the grains too.. There are several to choose from, which one do you recommend I begin with? I'll paper trade it on my TradeStation simulator to get a feel for it.. I believe there's mini soy, wheat and corn on TS.

 

Thx,

Tradezilla

[TRADEZILLA 10]

Tradezilla,

Actually, that's a very good idea; to trade the pre-market hours on the major report days. I do notice that in general, there's a lot less whip action during those hours.