Hi! Wanted opinion on the strategy of sell when open = high and vice versa

[mohan.sic]

"Open" = Constant .. so ? What is the interpretation ? Which indicators / parameters you use in trading whose calculation includes 'open '?

I think you are not clear.

How do you define a intraday trend ?

 

[deba72]

I think you are not clear.

How do you define a intraday trend ?

You din't answer my query.. Ok..you tell me how do you define ..

 

[marimuthu13]

guys, don't divert thread owner's topic of interest...:rofl::rofl::rofl::rofl::rofl::rofl:

 

[mohan.sic]

You din't answer my query.. Ok..you tell me how do you define ..

I said Open level is useful to understand if a intra day trend is up or down.
So why are you asking me again how is "open" useful.

you get the point ? You are asking something which i already answered.

Problem is you are thinking TA is just about indicators. Many of us after a point of time into charting, forget about basics of chart reading and we look at the indicators and their parameters ignoring price patterns.

When you look at an intraday chart which starts at 9.15 Am - How do you identify a trend in the middle of a the day ?

This is where Open level is very important.

 

[mohan.sic]

guys, don't divert thread owner's topic of interest...:rofl::rofl::rofl::rofl::rofl::rofl:

This is not diverting. I must say this is actually closely related to thread topic.

Threads topic is " Sell when open = High " and " Buy when Open = Low "

It suggests that, after stock opened for trading, it dint touch any new high and started falling from the opening level. So the assumption is when Open and High are same - Its a downtrend. Here "Open" is used to identify the day's trend at that point of time.

And we are discussing the same.

 

[deba72]

I said Open level is useful to understand if a intra day trend is up or down.
So why are you asking me again how is "open" useful.

you get the point ? You are asking something which i already answered.

Problem is you are thinking TA is just about indicators. Many of us after a point of time into charting, forget about basics of chart reading and we look at the indicators and their parameters ignoring price patterns.

When you look at an intraday chart which starts at 9.15 Am - How do you identify a trend in the middle of a the day ?

This is where Open level is very important.

Did you at all understand what I wrote in post #6 in this thread ? Anyway I don't want to get into any more argument with you on this. If you have a great strategy built around ' open ' price which is making money, I feel happy for you. Best of luck ! :clap:

 

[mohan.sic]

Did you at all understand what I wrote in post #6 in this thread ? Anyway I don't want to get into any more argument with you on this. If you have a great strategy built around ' open ' price which is making money, I feel happy for you. Best of luck ! :clap:

Of course you cant make arguments without understanding.

Do some chart reading without indicators and you can easily understand what i am saying.


Then you can explain me with a example why you think its not useful.

or if you want i can help you with a detailed example about its importance.

best of luck.

 

[mrktmstr]

Open Price has importance at least for Intraday movements.

Just Observe the Fibbonacci Ratios or Gann angle (0.382 / 3rd angle)movement frm Open , it is a stiff Resistance or Support for the day .

From Past observations i felt confidence in this method,but couldnt backtest for long period due to lack of chart coding...

"Not saying this a Perfect one,but can be refined as a good one":thumb:

 

[anal_]

A simple backtest will show this strategy will bring you to an account blow up, tried doing it Quantopian, and the equity curve was at -32% after an year. Leave alone the trading costs.

Now the question you ask while building a strategy, what moves the markets (this is difficult)? And secondly who moves the markets (this is tricky).

When you know these 2 things, which changes a lot on a day to day basis, you are said to have a market understanding. Based on this understanding, ask yourself, is the open price and high price in the first 5 minutes moving the markets? Obviously No. Its just a pattern your eyes noticed on few charts and now they have become a part of the recency bias of your mind. Is the MACD and Bollinger band on your chart that is moving the market?

Markets move due to expectations, and you will be analysing this part first. So what is everyone expecting? A trader, an investor, a market maker, whos expectations are over powering other expectations. Auction market theory gives you perspective into this type of reasoning, based on mean reverting days and trending days.

Expectation ---> Orders ----> Volume ----> Price ----> Indicator

This is the occurrence cycle. Anything on the left of the price will lead and on the right will lag. Now you know how to think while developing a strategy.

A good strategy is a function of price, volume and volatility. A robust strategy will be function of all the 4 occurrences. Like

1. news, events, inter market analysis, intra market analysis, sector etc. (which make expectations)
2. Order book/Tape (orders)
3. Time and sales, order flow, volume (volume)
4. Price action (price)

I have worked with prop desks, which make you think on the lines of the first occurrence, which is expectation. It is high risk but high reward since you capture the full move. Then there is another institutional community like scaplers and jobbers which make a living by analysing the second occurrence. It is low risk, fixed reward.

And then there is the retail trading community (majority of them) which struggles with the 3rd and 4th occurrence all their life. High risk, low reward. Further they go on to using indicators derived from price to predict price. How contrary that sounds?

Hope this helps.

 

[TracerBullet]

Read this blog post. Open Location within Daily Range can be used to guess possiblility of trend day.

the open tends to be near the extreme of the range. This is a repeatable element of market structure on all bars from intraday to yearly. This fact is not, in itself, a trading edge.

On large range days, the open tends to very near the high or low of the day with amazing regularity
The point is not to predict the day’s range, but to use market action off the open to set up trades and to get a better read on the probabilities for the day as it unfolds
if you buy an upside breakout off the open looking for a trend day, the chances of that trade working shrink if the market trades very far below the open
If a day has a moderate range in the late morning and has traded on both sides of the open already, there is not a high chance of the day being a solid trend day