US indices trade almost 24 hours, but the real volume arrives when the New York stock exchange opens at 09:30 New York time (13:30 UTC in summer, 14:30 UTC in winter). The first 90 minutes concentrate a large part of the day's range, which makes them both the best and the most dangerous time to trade the Nasdaq and the Dow (US30).
The opening-range method
- Mark the high and low of the first 15 minutes after the open.
- Wait. Do not trade inside the opening range.
- Long: a 5-minute candle closes above the opening-range high, ideally with the day's pre-market trend.
- Short: a 5-minute candle closes below the opening-range low.
- Stop: the middle of the opening range. Target: 2R or the previous day's high or low.
Filters that save money
- If a high-impact US release is due at 14:00 UTC (for example, some ISM data), wait until after it.
- If the opening range is very wide, reduce size or skip: the stop becomes too large.
- No trades after 90 minutes: the market often goes into a midday lull.
Risk management
One or two trades per session. If the first trade is stopped, a second attempt is only allowed in the same direction and only after a new clean break. After two losses, the session is over. The Nasdaq can move fast enough to turn one stubborn trade into a daily loss breach.
Who it suits
Traders who can sit in front of the screen during the US open: afternoon in Europe, evening in India and Pakistan, and morning in Latin America. It does not suit anyone who cannot watch the trade until it is closed.