The open can be a time of great opportunity. But you need to be prepared.
My default option is to always wait for the Trading Timeframe (TTF) to develop some structure. To wait until the initial trend is clear and obvious.
But there are some times when I'll trade earlier, before the TTF settles into the day's trend.
Like here…
There are generally three situations where I'll take an early trade.
The only way I can catch them is to be prepared. BEFORE THE OPEN!
I will ask some questions:
(1) Is there some exceptional pre-session structure to trade off?
(2) If price drives strongly, will it be driving into clear space that offers good potential for continuation?
(3) If price offers a trap immediately after the open, would the structure offer a multiple-R potential?
If none of these three questions suggest good trade opportunity, then I will happily sit back and relax until there is some structure in play.
But if the answer to any of these questions is YES, then I will pre-consider how the price action will need to set up. And I will prepare myself for potential opportunity very quickly after the open.
Today I will remain alert and ready for a possible trap opportunity.
See here for more on PB Setups.
(1) Is there some exceptional pre-session structure to trade off?
(2) If price drives strongly, will it be driving into clear space that offers good potential for continuation?
(3) If price offers a trap immediately after the open, would the structure offer a multiple-R potential?
If the answer to any of these is YES, then pre-consider how the price action will need to set up. You might just find some opportunity very quickly after the open.
But if the answer to all three is NO, then sit back and relax. Let the open play out and wait until some new structure develops.
Happy trading,
Lance Beggs