One developing firm trader struggled trading the open. He sought a one-on-one to discuss improvement trading the open with me. He sought counsel from Dr. Steenbarger as well.
I made some suggestions and it was up to this trader to execute on solutions to improve.
He did. Boy did he!
After implementing solutions for this challenge of trading the open trader wrote:
We talked a little over a month ago about The Open. I had identified in my Monthly Review that this was an area I needed to improve on, and we talked about the idea that I should have a separate Playbook for The Open. I’ve been working on this. I’m really excited that I’ve been starting to find more success during this time period (see below for my stats on the open since October). In an effort to review and try to identify what is working in order to distill the variables for my Playbook for The Open, I’ve compiled a template reviewing all my profitable plays made at The Open in October (attached). I’m looking for patterns and looking to widdle this down to the “best of the best” for my Playbook. I will continue to do this exercise for November.
Some of the things I’m learning are:
I’m finding more success when coming up with specific stocks and specific ideas for The Open that are separate from my top ideas for the day. Most of the time, my top ideas for the day are not good ideas for the open…they are often too volatile and are usually meant for a bigger picture intraday swing idea setup later in the morning/day.
I’m finding more success with targeting lower priced stocks and/or less volatile stocks to trade at the open that help make it easier to control my risk.
I’m finding more success when focusing on taking profits and reassessing. However, this is not to say I should not be trying to hold an Opening Drive for the meat of the move. And I’m finding that if I enter a Backside Short into strength at the open, this is often an opportunity to hold a piece for a swing.
The trades I’m making at the open are usually not my most profitable trades of the day, but if I can build consistency at the open, they can provide a nice cash flow that can put me in a position of strength when attacking my bigger picture ideas later in the day.
My plays at the open are looking a lot like my general Playbook (higher timeframe momentum + outside ranges + intraday triggers) but with a different approach.
@MikeBellafiore back again
Let me be clear. This is extraordinary work by a developing trader. The quality and thoroughness of his work stands out relative to his peers. It is worth copying by the trading community.
What I like most about his note, is trader found solutions for a challenge. Trader developed specific trades for the open, with clear variables, to trade that made the most sense to him. Trader measured his results. He archived the real-time examples of the best traders for him on the open for study. Trader now knows what to look for on the open.
In short, this is how you do it. This is how you improve as a trader.
As always your questions/feedback are welcome- [email protected]
*no relevant positions