Sometimes the simplest ideas are the best.
And this one is REALLY simple.
For years I’ve stated that my default option with half-day holiday sessions is to stand aside. Let them go. Volume is low and opportunity is most often limited.
On those rare occasions when I do trade them, when there might be some fundamental or technical factor with good potential to drive price, then I’ll do so in a definite “trade with caution” mindset. Being ok with no trades at all. And letting the opening structure develop first, to see whether or not this is an environment worthy of my time.
But the default option is take the day off. Use it as an opportunity for further review or study.
The next day though… that’s something I’ve not discussed often.
The day AFTER the half-day holiday session.
A day I REALLY look forward to.
Firstly, emotion drives price. And one factor that intensifies emotion is time. It’s hard enough having to wait two days over a normal weekend to be able to trade again. But three days… just try to hold back those undisciplined, emotional masses.
And secondly, the old standard concept of “volatility contraction leads to expansion“. The start of the week is compressed into one tight little narrow range. And I can just about 100% guarantee you, the remainder of the week will not remain contained within that high and low. It’s expansion time!
I hinted at this in my social media post a few weeks ago (31st of May) following the Memorial Day holiday. Note the second paragraph in particular.
And again this last week, following the Juneteenth holiday.
- Consider it like an Opening Range for the following four sessions.
- A place to structure trades, should price retest the area.
- And a simple means of establishing a bigger-picture bias.
Standard opening range theory, shown here as it normally applies to a typical trading session:
In the “holiday session” scenario though, we’re looking at the whole week of data rather than one session. And defining the opening range as the high to low from Monday’s half-day holiday session.
It’s currently Wednesday evening (as I’m writing this) so let’s catch up with the price action so far. The following charts display the 30 minute Higher Timeframe data, with the daily RTH sessions shaded green.
In particular for those who might have fought the tape, trying to short all the way up. Question why. Context suggested potential for expansion. Price behaviour from the open confirmed it. The best opportunity is LONG. But if you must SHORT, step aside and await the end of the momentum drive. The time for shorting was approaching midday and beyond (if at all).
Keep it simple.
The standard trading timeframe opening range provides a simple means of confirming your intra-session YTC Price Action Trader bias (see volume 2 on future-trend assessment).
And the build up and release of emotion from a narrow-range holiday-session provides the same, but on a larger time scale.
Watch future holiday sessions and see if this concept can add value to your trading plan.
PS. The following page lists all YTC articles with the tag: Opening Range – https://yourtradingcoach.com/tag/opening-range/
Your blog has been incredible for learning.
I have a question not related to above article.
When I trade with a small capital I performs good , my focus is on price and its behaviour,
But as my account grows my focus gets disturbed and shifts partially towards money (How much I earned , How much I need to get to my set target, How quickly can I get it)
This eventually results in a draw-down phase.(Same thing happened 2-3 times)
Can you please guide me so that I can overcome this repetitive scenario.
If you could use the contact page for non-related questions in future, it would be much appreciated.
There is no simple solution. Work will be needed. And much trial & error. There are two general approaches though.
(1) Examine and understand your relationship with money & risk. Dig deep into the feelings and emotions that lead to this change in behaviour. Understand what is happening and why. And find a way to resolve these issues.
Or (2) Try to avoid the problem without having to understand and resolve it, by finding some way to shift your focus back to price rather than money. eg. Some people find it helps to set up their screens and daily process such that it shows NOTHING at all in dollar value. Keep that for the weekend. Everything during the week is points/pips/ticks related. Or find some mindset state that creates real focus, such as Don Miller’s plan of pre-session convincing himself that the prior day was a significant drawdown day, placing himself in a hyper-focused comeback mode (which is the state he trades best in). Maybe neither of these will work for you. That’s fine. Something else will and you need to brainstorm it and take it through a process of trial & error. Find something that takes your focus off the dollars and back onto the price action.
First of all thank you for your reply lance.
Sure I will definitely use contact page for non related queries.
Thanks for possible ways and
Thanks for reminding that there is no simple solution and I will have to find a way as per my psychology.