Day trading the open is challenging. Crafting a game plan for the open is impossible…
Or is it?
We have volatility, over night orders, earnings, sector related news. So many things can affect early price action.
This means you should step aside and let the dust settle. Right?
Day Trading the Open in GS: Goldman Sachs Follow Up
Yesterday we made an explicit call in GS to leave the stock alone on a higher open after earnings. The key to the game plan was “on a higher open.”
Trading in a vacuum without putting the recent daily and weekly price action in the context of today’s trade is poor trading. To gain a repeatable edge you need to trade the big picture. How far back you go for the big picture is relative to your hold time.
Your trading plan should have explicit trade expectations, which will lead you to certain time frames to monitor.
Essentially you need to believe that buying and selling pressure, will exhaust itself after 3-5 days. When you have conviction in this cycle, it becomes easy to forecast the open.
Eliminate inside days and multi day consolidations. We are talking about consecutive trend days and higher-highs (or lower lows).
Watch the ten minute video to learn how the trade sets up for the open.
Other Stocks in Play Today
Shares of Schlumberger Limited (NYSE: SLB) rose over 2 percent in after-hours trading after the company reported stronger-than-expected earnings for the first quarter.
Schlumberger (SLB) said it will lay off another 11,000 employees amid continued weak oil prices, saying that a recovery in U.S. land drilling “will be pushed out in time.” In January, the oilfield services giant said it had slashed 9,000 jobs late last year, a 7% cut in headcount. On Thursday, it said the new cuts represent a 15% decline from Q3’s peak. “We also anticipate that a recovery in activity will fall well short of reaching previous