Forecast the move of the Index

[Les Carlin]

Opening ranges

tomorton:

I trade the S&P and get very similar patterns right near the open. However you can take a half-hour, one-hour and 1+half hour timeframes and define the top and bottom and you will probably see peaks or troughs forming within that range. The issue here is what time-span do you regard as the opening one?

There are Opening range Breakout systems around (I think JohnnyT is/was rather fond of them) and they are based on determining volatility over a few weeks of previous sessions, then using this calculation to fix the upper and lower tradeable limits from which to trade the previous sessions. Have a look at
www.tradingeducators.net/3.htm

I evolved my own method, which is to look simply for 2 peaks or troughs in the first half hour, plus a break of the opening half hour range. There's a bit more to it than that, but i backtested and papertraded this idea and found it works well. Point is, if you have an idea about using say an opening range based on the N pattern, DYOR on it and see if it works.

Up till now I have to admit I've been the worst ever intra-day trader, just entering positions as moves ended, never holding long enough for the move to resume (lack of confidence). But this is tempting me to try again. Are people using this pattern, with refinements? Or have people found it to be a waste of time?

I think this may not be to do with your strategy, but more about being disciplined psychologically. Its going to be worth addressing this.

 

[tomorton]

Thanks Les - your very simple method appeals because it is simple but also you have backltested and are using it with actualcash I take it.

As far as discipline goes, yes you're right I find it difficult to overcome the fear/greed spiral, but whenever I've had a properly thoought out plan in place in advance, I do stick to it and avoid the pitfalls. If I've got faith in the plan - such as enter at X and exit with N% loss at Y or take half-profits at Z and hold the rest until Q, - I do follow it.

I heard a trainer on another subject once say Those who fail to plan, plan to fail. A touch trite but very true in this game.

Best wishes,

Tom

 

[mmillar]

If anyone is interested in Opening Range Breakout (ORB) systems then you may want to look at the threads by Bankbuster here...

http://www.spreadsbetting.co.uk/yabbse/index.php?board=1;action=display;threadid=113

http://www.spreadsbetting.co.uk/yabbse/index.php?board=1;action=display;threadid=124

 

[Les Carlin]

your very simple method appeals because it is simple but also you have backltested and are using it with actualcash I take it.

Yes - i've been trading it live since Sept. It started to turn money for me, then i had to have a break from trading for unrelated reasons, then resumed and spent a couple of months re-establishing my discipline. Then the war happened which were very difficult conditions, and have only just started making money on it again last week.

The method does involve some other elements, which are related to difficult current conditions and my own trading style. If the basic approach appeals to you, i would still strongly advise you do your own testing on it.

whenever I've had a properly thoought out plan in place in advance, I do stick to it and avoid the pitfalls

This surely demonstrates that you should have a tradeplan for EVERY single trade. No exceptions..

 

[tomorton]

Les - thanks for the info and for your very true words on planning.