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Hi, Al said in video 48D that if the opening range is between 30% and 50% of average days' range, then look for a measured move after the BO of the opening range. However, if the opening range is >50% of average days' range, then progably TR day.
Just wanted to know how should I trade if the opening range is <30% of an average days' range?
Thanks so much for your advice!
Thanks so much for your reply and info!
Hello, I've been thinking about BO mode on the open and wanted to share an idea:
Al Brooks is teaching us to develop behaviors and reflexes that help us trade the market profitably. However, those behaviors and reflexes change based on the price action in front of us.
From the lesson 48 videos I've gathered that the open on the 5 minute chart usually begins with a Trading Range. Normally, in a trading range, traders trade against Break Outs. However, the reason traders might label a Trading Range as being in Break Out Mode (BOM) could be that they are then looking to trade with a Break Out after a Follow Through bar, rather than against it. So, the behavior that helps traders is to watch for signs of transitions because that changes how they react to price action. Simple enough.
Applying BOM to an opening Trading Range of 30% to 50%, would mean that traders are looking for a Break Out so that they can trade with it, rather than against it.
Today, January 3, 2025, is a good example. The Opening Range formed a 30 point range or so. I traded it as a Trading Range, betting against Break Outs. Thirty points is about 50% of an average daily range, with daily bars 60 to 90 points tall. Therefor, traders should have been looking for a transition out of that Trading Range.
After bar 18, the market formed a Higher Low at the 20 EMA, then broke out of the top of the range and followed through with a doji after a 6 bar Micro Channel. Seeing that price action, we would have stoped betting against Break Outs after the reversal at the 20 EMA and look to enter sometime after the Follow Through on the Break Out.
So, overall, my observation about opening Trading Ranges is that we look for things that help us change our reflexes regarding price action.
Hope that helps!
