Technique may be too sophisticated of a word for the entry method I'm going to describe. I'm simply going to be buying the break of the open range. This entry will be for days where I'm expecting a large momentum move in the market (i.e. European markets up or down more than 3%, our own markets gap up or down big, the Treasury just announced some new acronym to fix the market...). The price action I've seen play out over the last couple of months has been: 1.) Market gaps up or down 2.) Gap gets partially filled 3.) Price reverses and accelerates strongly to new highs or lows, slicing through the open range high or low. This usually looks likes a rounded bottom or a V bottom.
I'm calling this technique BOR because it is more boring than my normal style and doesn't require much skill, but sometimes the simplest entries are the most effective.
BOR Rules:
1. Place stop limit order two cents above (or below) market opening price at 9:50.
2. Reduce risk after successful breakout by tightening stop.
3. Move stop to break even 30 minutes after initiation of position.
4. Exit position at 11:54.
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2 comments:
Hi Trader Rick,
Just encounter your blog from Jamie and I find yours a good reference. Keep it up. Might examine your BOR technique and see if I can apply it. Like you, I do my trading full time but not that much educated yet, still trying to strengthen my foundation.
Thanks. The technique is not tested yet but I should have some examples in the coming month.
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