Traders Expo Presentation Slides – Scalping The Open

Report
Al Brooks
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Scalping the Emini open
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Al Brooks
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Live Emini trading room
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When does opening range end?
 No specific time, usually before 8:30 am PST
 As early as first bar or as late as 10 am
 With breakout, if day starts with TR
 With TR, if day starts with BO
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Why trade the opening range?
90% chance of swing trade…
 4 points or more profit
 Reward at least twice risk
 Strong swing = best math for scalp
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Either high or low of day forms in…
 First 5 minutes on 20% of days
 First 35 minutes on 50% of days
 First 2 hours on 90% of days
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Goal of most traders
 Find one or more swing trades
 But, many traders scalp while waiting
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How many scalp setups?
 Great scalpers see setups on every bar!
Take 20 or more trades a day
 Most traders should focus on swings
Take only occasional scalps
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Scalps during
st
1
hour
 Very difficult to make money scalping
 Better to look for swing
 Best scalps are also swings…so swing!!
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Main reason to avoid scalps…
 Requires quick thinking and quick ACTION!
 If cannot exit quickly when wrong, don’t scalp
 If cannot quickly reverse mindset, don’t scalp
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When wrong, exit quickly!
 Always have a plan to exit
 Have stops in market, not in head
 Stops protect you from yourself!
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If TR becomes trend, trade like trend!
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PB below bottom of bull breakout
If initial tight trading range has bull BO…
 PB can fall below bottom of bull leg
 Look to buy…
Reversal up
Below TR with limit order
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Buy more below!
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Enter with stops or limit orders?
 Trading range = limit orders = bet breakouts fail
 Trend = stop orders = bet breakout succeed
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First few bars often tell if…
 Trend day
 Trading range day
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Trend from the open
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Trend from the open
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Trading range day
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Limit order open
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Dojis, tight trading range, at MA
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Signs of strong trend
 Consecutive strong trend bars
 Strong reversal bar if gap
 Strong breakout from TR price action
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3 consecutive bear bars, 3rd one = strong
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Strong bull reversal bar, good context
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Consecutive trend bars, but bad context
 Unlikely to form trend
 More likely will reverse
 Likely will form opening reversal
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Dojis, tight trading range, at MA
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Reversals are common
 Market always searches for direction
 Probes up and down
 Needs to find out what is too far
 Most days, first direction is wrong
 Initial move creates opening reversal
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Opening reversals
Strong, quick test of support or resistance
 Creates tail on most trend bars on daily chart
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Opening reversal at 60 min MA
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Opening reversal at yesterday’s low and high
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Always look for…
 Major trend reversal
 Breakout or failed breakout of anything:
 Swing high or low including high or low of yesterday
 Trend line
 Trading range or channel
 Moving average
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Is trend continuing or failing?
 Is breakout continuing from 1st bar
or failing (reversing)?
 If failing, is market just pulling back
and about to resume breakout?
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Swing begins with strong signal bar
Bull swing usually begins with…
 Bull body
 Close at or near high of bar
Bear swing usually begins with…
 Bear body
 Close at or near low of bar
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Strong buy signal bar
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Strong sell signal bar
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If no clear signal bar…
Wait for strong breakout up or down…
 1 big trend bar, especially with follow-through
 3 – 5 smaller consecutive trend bars
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Strong breakout after bad signal bars
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Opening reversal at MA after gap up
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Opening range setups
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Double bottom, PB to MA
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Wedge, big Low 2
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LL MTR = Lower Low Major Trend Reversal
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HL MTR, DB
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Trading the open
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Trading the open
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Parabolic wedge on open
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Endless pullback, then reversal
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A week of trading the SPY opening range
 Pay attention to yesterday
 Look for reversals, breakouts, and failed breakouts
 Look to swing, using usual management
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Monday
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Monday
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Tuesday: after sell climax, expect rally
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Now 2 big bull bars
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Management of initial long
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Buy closes, probable MM up
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New BO so raise stop
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Buy failed reversal attempts
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Management of initial long
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Spike and channel, MM, top of TR, 2LU
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Management of initial long
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Wednesday: gap above TR
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Wednesday
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Wednesday
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Wednesday
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Wednesday
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Thursday: TR open, AIL
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Thursday: FOMC report
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Friday: Follow-through buying
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Friday: parabolic wedge, buy climax
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Al Brooks
BrooksTradingCourse.com
Scalping the Emini open
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BrooksPriceAction.com

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