Stock Trading Strategies Opening Range Trading

[sibole4]

great video, i understand this is for beginners but the abandoned baby pattern was the buy at mid-point. good job with the 5 minute intervals, i never see anyone doing videos like that.

[StockTradingMaster]

Thumbs up for the effort you put in to produce this video

[arnewaisee]

Hi again!

What do you think about only trading the breakouts that are correlated with the other major indices? For example: Only trade a breakout in the SP500 if also NASDAQ and DJIA are breaking out in the same direction.

Next question: Is it necessary to look at the volume when trading opening range breakouts? CMC markets doesn't provide this for their customers =(

Thanks!

[StockTradingMaster]

@arnewaisee No. You will find that the markets move together. Even the Russell 2000 which leads does so anywhere from days to weeks and usually not minute by minute. I would consider bringing in open interest and futures if your charting software allows it. Yes to your second question. You want rising volume as it approaches the opening range high. Rising volume as the market moves up is what gives you confidence the move will continue. Falling volume often means headfake.

[StockTradingMaster]

@nightlightview You can really get trapped. If the after market shows heavy buying, the market could gap up open and continue higher. However, it could also gap up open and then the pros fade the gap in a bet that market will return to a level more in line with its longer term moving average. After market and pre-market futures also scare me. I prefer to use this strategy on lower volatility days.

[arnewaisee]

hi! thanks for the video. I've been practicing this strat. for a while but I've never used the confirmation method you're using. Is it really possible to always wait 5 minutes or more after every break? the rally could be declinig?

Please answer!

Best Regard

T.H.T

[StockTradingMaster]

@arnewaisee That's what I would do. If you don't get confirmation, the probability of jumping too early into a headfake goes way up. You have to balance the probability of a winning trade against how much profit you make from the move. I like to adjust for a higher probability of a winning trade with lower profit on the trade if I'm correct (aka waiting an additional 5 minutes for confirmation). There's so many ways to do this the trick for U is to find one that U can stick with.

[Cameosis]

good vid. I fooled around with the opening range and started throwing Fibonacci Retracements and stuff in there as well. Thanks for sharing

[StockTradingMaster]

@Cameosis You know, people tell me that I can't use Fibs for such a short time frame but I have found that to not be true. For example, the spot price of Gold today popped New York time, then did a Fib retracement of 38.2% 3 hours later, then continued higher. Good for you for tossing some Fibs in there.

[sodjs]

WELL

☆☆☆☆☆ALL☆STARS☆☆☆☆☆ I really thankfull for your explanation , ! I dnt know how to manage thisss !

[requiem777]

Awesome, I have been trying to work on a similar strategy, this will help me refine it. Tell me, does this strategy have a contingency for the days where the price just skyrockets or plummets in the first half hour of trading? It would be a shame to miss those opportunities, they can be quite profitable. I guess the rule would be just to use discretion, if there's no oscillation and it just heads one way, jump on.

[StockTradingMaster]

@requiem777 Yes and great question. I forgot to talk about that in the video darn it! I don't use this strategy on high volatility days (VIX). It would be interesting to adjust the time for various markets to find the optimal time frame, i.e. 30 minutes, 1 hour, etc. to profit even in more volatile markets.