Let's start by viewing the market right as it opens:
Readers of the YTC Price Action Trader have several principles they use for projecting the upcoming price swings and identifying areas of potential trade opportunity.
There is something else that should be jumping out at you as relevant as well.
Something that we have discussed numerous times over the last couple of years.
That's right – it's a trap RIGHT BEFORE the regular session open.
See here if you missed the prior articles:
Here is the general idea:
This is a feature of the open, long recognised through my daily Market Structure & Price Action Journal practice.
Traps just before the open can often provide nice follow-through, when the breakout fails in the opening price sequence.
Why not today?
Because there is a price action feature that suggests the trap is itself potentially a trap.
It's IMPORTANT to look at the area the trap is moving into.
While normally I only put minor weighting on overnight price structure, there are some times it offers clear warning signs.
Let's move forward and see the outcome.
A break of a significant level just immediately prior to the RTH open, or immediately after the open, should have you considering the potential for trap-driven opportunity. But just pause for a second and check the context. Does the pre-open structure provide a potential barrier to movement? The trap concept will still apply. However you might just need to widen the area and hold off on entry, until the barrier is also broken.
Because otherwise, you might find that the trap you're seeking to trade is itself a trap!