On Monday, prior to the market open, I shared the following YTC article via social media – http://yourtradingcoach.com/trading-process-and-strategy/patience-at-the-open/
The title of the article is "Patience at the Open".
And that pretty much sums up my intent in sending out that link. Simply trying to slow down the excitement and stop you jumping into the market prematurely, on the first day back from a long-weekend.
If you trade as I do, taking pieces out of the trend structure as it unfolds at the RHS of the screen, there is often no hurry to catch the first trade of the day.
If the bias is immediately clear, by all means trade.
But if there is any uncertainty, the superior play is often to stand aside and wait. Remain patient. Allow the uncertainty to resolve itself.
This will typically only take a few minutes.
The prior article outlined two of the "warning signs" which have me standing aside. Firstly, bias conflict. And secondly, seriously bad-looking price action (choppy with much overlap). Review the article if you missed it.
But in a great example of the market rhyming, rather than repeating, Monday offered a slightly different scenario. It's a variation of bias conflict, but unlike the prior example which had a directional trend into the open, this time we had a sideways market.
We manage this exactly the same way though. Remain patient. And allow any conflict or uncertainty to resolve itself.
Let's step through the open on Monday.
Let's zoom in a little…
This is a really easy concept. Our aim is simply to stand aside and wait, whenever there is uncertainty in the opening market bias.
There may be no uncertainty. You might have a directional market into the open with a momentum drive in the same direction. Go for it. There's no need to wait.
But if there is any doubt, or confusion, or uncertainty, then stand aside. Wait till it resolves itself. Wait till there is some clarity. And wait till you have confidence in your read of the market action.