The opening range (OR) is the first 30-minutes of the trading day. It doesn’t include the overnight session so it begins at 9:30 Eastern time. The price action during the OR is often very important in setting the trading range for the entire day. Below are some charts to explaining OR setups.
Reversal candles that form during the OR can be a particularly good opportunity!
It’s essential for a price action trader to be flexible and not get locked into a trade. When a good chart setup fails it’s often a great opportunity in the opposite direction. Too many traders stick with the original trade even though the setup failed. Don’t be that trader!
Price doesn’t always get back to the HB zone (see the first chart) so sometimes that setup doesn’t trigger. I’ll often use a break above/below the OR candle high/low to trigger a half-size position if the HB zone wasn’t touched. Or I can just not trade that instrument. Sometimes a good HB zone trade setup fails as in this chart. When the stop was triggered I could flip from a failed short trade into a long entry above the 🐻 reversal high because failed moves are often the best moves in the opposite direction. Or, I can just move on to another trade on a different chart. All of those trades are simply using the Opening Range/HB zone setups. I’ve removed the pivot levels and the 8 SMA bands for clarity however, taking trades in the direction of the sloping bands improves the setup. Make sense? 🤔
Thanks for this. So when you finally have a directional bias about how many DTE on average to you look for?
There’s no hard and fast rule to selecting the expiry of a position. You can often get clues off the price charts but if you’re not sure I’d suggest giving yourself a minimum of 10-14 DTE and you could certainly consider much longer than that. I have some positions with 30-60+ DTE. It’s good to have positions with multiple expiry’s to reduce the time risk in your portfolio. If you have multiple positions all crowded into a small time frame then you risk missing out on a move because time simply ran out on your positions.