Transcript Traders Expo Presentation Slides – Scalping The Open

Al Brooks
BrooksTradingCourse.com
Scalping the Emini open
BrooksTradingCourse.com
BrooksPriceAction.com
Al Brooks
BrooksPriceAction.com
Live Emini trading room
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Goal of most traders
 Find one or more swing trades
 But, many traders scalp while waiting
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Scalps during
st
1
hour
 Very difficult to make money scalping
 Better to look for swing
 Best scalps are also swings…so swing!!
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
When wrong, exit quickly!
 Always have a plan to exit
 Have stops in market, not in head
 Stops protect you from yourself!
BrooksTradingCourse.com
BrooksPriceAction.com
If TR becomes trend, trade like trend!
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Buy more below!
BrooksTradingCourse.com
BrooksPriceAction.com
Enter with stops or limit orders?
 Trading range = limit orders = bet breakouts fail
 Trend = stop orders = bet breakout succeed
BrooksTradingCourse.com
BrooksPriceAction.com
First few bars often tell if…
 Trend day
 Trading range day
BrooksTradingCourse.com
BrooksPriceAction.com
Trend from the open
BrooksTradingCourse.com
BrooksPriceAction.com
Trend from the open
BrooksTradingCourse.com
BrooksPriceAction.com
Trading range day
BrooksTradingCourse.com
BrooksPriceAction.com
Limit order open
BrooksTradingCourse.com
BrooksPriceAction.com
Dojis, tight trading range, at MA
BrooksTradingCourse.com
BrooksPriceAction.com
Signs of strong trend
 Consecutive strong trend bars
 Strong reversal bar if gap
 Strong breakout from TR price action
BrooksTradingCourse.com
BrooksPriceAction.com
3 consecutive bear bars, 3rd one = strong
BrooksTradingCourse.com
BrooksPriceAction.com
Strong bull reversal bar, good context
BrooksTradingCourse.com
BrooksPriceAction.com
Consecutive trend bars, but bad context
 Unlikely to form trend
 More likely will reverse
 Likely will form opening reversal
BrooksTradingCourse.com
BrooksPriceAction.com
Dojis, tight trading range, at MA
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Opening reversals
Strong, quick test of support or resistance
 Creates tail on most trend bars on daily chart
BrooksTradingCourse.com
BrooksPriceAction.com
Opening reversal at 60 min MA
BrooksTradingCourse.com
BrooksPriceAction.com
Opening reversal at yesterday’s low and high
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
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?
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Strong buy signal bar
BrooksTradingCourse.com
BrooksPriceAction.com
Strong sell signal bar
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Strong breakout after bad signal bars
BrooksTradingCourse.com
BrooksPriceAction.com
Opening reversal at MA after gap up
BrooksTradingCourse.com
BrooksPriceAction.com
Opening range setups
BrooksTradingCourse.com
BrooksPriceAction.com
Double bottom, PB to MA
BrooksTradingCourse.com
BrooksPriceAction.com
Wedge, big Low 2
BrooksTradingCourse.com
BrooksPriceAction.com
LL MTR = Lower Low Major Trend Reversal
BrooksTradingCourse.com
BrooksPriceAction.com
HL MTR, DB
BrooksTradingCourse.com
BrooksPriceAction.com
Trading the open
BrooksTradingCourse.com
BrooksPriceAction.com
Trading the open
BrooksTradingCourse.com
BrooksPriceAction.com
Parabolic wedge on open
BrooksTradingCourse.com
BrooksPriceAction.com
Endless pullback, then reversal
BrooksTradingCourse.com
BrooksPriceAction.com
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
BrooksTradingCourse.com
BrooksPriceAction.com
Monday
BrooksTradingCourse.com
BrooksPriceAction.com
Monday
BrooksTradingCourse.com
BrooksPriceAction.com
Tuesday: after sell climax, expect rally
BrooksTradingCourse.com
BrooksPriceAction.com
Now 2 big bull bars
BrooksTradingCourse.com
BrooksPriceAction.com
Management of initial long
BrooksTradingCourse.com
BrooksPriceAction.com
Buy closes, probable MM up
BrooksTradingCourse.com
BrooksPriceAction.com
New BO so raise stop
BrooksTradingCourse.com
BrooksPriceAction.com
Buy failed reversal attempts
BrooksTradingCourse.com
BrooksPriceAction.com
Management of initial long
BrooksTradingCourse.com
BrooksPriceAction.com
Spike and channel, MM, top of TR, 2LU
BrooksTradingCourse.com
BrooksPriceAction.com
Management of initial long
BrooksTradingCourse.com
BrooksPriceAction.com
Wednesday: gap above TR
BrooksTradingCourse.com
BrooksPriceAction.com
Wednesday
BrooksTradingCourse.com
BrooksPriceAction.com
Wednesday
BrooksTradingCourse.com
BrooksPriceAction.com
Wednesday
BrooksTradingCourse.com
BrooksPriceAction.com
Wednesday
BrooksTradingCourse.com
BrooksPriceAction.com
Thursday: TR open, AIL
BrooksTradingCourse.com
BrooksPriceAction.com
Thursday: FOMC report
BrooksTradingCourse.com
BrooksPriceAction.com
Friday: Follow-through buying
BrooksTradingCourse.com
BrooksPriceAction.com
Friday: parabolic wedge, buy climax
BrooksTradingCourse.com
BrooksPriceAction.com
Al Brooks
BrooksTradingCourse.com
Scalping the Emini open
BrooksTradingCourse.com
BrooksPriceAction.com