Copyright 2009, DayTradetoWin.

com

All rights reserved. No part of this work may be reported or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of
the publisher and author.

Printed in the United States of America

Published by DayTradetoWin.com 2009

The charts used in this book were created by using www.ninjatrader.com

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 Disclaimers

The methods described in this book are for educational purposes only. Past results are not necessarily indicative
of future results. The author and the publisher assume no responsibility for your trading results. Trading
involves a high degree of risk. No recommendation is being made to buy any stock, commodity, option or other
financial instrument. Consult your financial advisor before starting any investment system.

U.S. Government Required Disclaimer - Futures, options, and spot currency trading have large potential
rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to
invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither
a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will
or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any
trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN

LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT
REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE
RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN
MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF
HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY
TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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Foreword
____________________________________________________________________________________________________________________________

Price action—when it comes to trading the markets, it’s a powerful tool. How can we use price to
tell us where price will be? How do we trade using opening price? How do we take overnight data
and use it to our advantage?

Well, it’s easier said than done. There are many aspects to what happens in the market. We look for
price patterns to substantiate our methods. Price goes up; price goes down—where should we get in?
Where should we get out? Are we late? Are we early?

Timing is the key to getting in and out profitably. We have found that some—if not most—price
action is random, but not all. If we could capitalize on trading correctly from the beginning of the day
and use what happens in the first minutes of trading to know what price will do, or how price will
react, do we then have a huge advantage over others? You bet!

The method is not difficult to calculate. The hard part is to understand why it works—and getting in
and out profitably!

When we look at overnight data, what is meant by “overnight”? Where does it start? Where does it
end? What are the highs and the lows, and how do we use them?

I’m going to show you some examples using Ninja charting software, and hopefully by doing so, you
will have a better understanding on how we trade the open—and why we do it.

Our philosophy is simple: Let’s trade the morning and be done by noon. 2 to 4 points daily, if all our
setups and triggers are hit. Afternoon trades do occur and are successful. The point is to trade for
profit and be finished. No over-trading and no staring at the screen all day. Let’s make our money
early and enjoy what life has to offer!

Understanding Opening Price

____________________________________________________________________________________________________________________________

When I refer to the opening price or the opening, I want you to think 9:30 am Eastern Standard
Time (EST).

This is very important because the opening price “9:30 AM” is the time when price is so erratic… so
unpredictable… that you would be crazy to trade during that time.

Think about how many people (and the types of people, organizations, banks, funds, hedgers, and so
on) are placing orders. Orders are placed with brokers to Buy at the Open from the day before, and
others have Sell at the Open orders as well.

These trades are put on for various reasons. Some are used to get out of a losing position—or to get
out of a winning position. Traders are entering positions for different reasons, even mechanical trading
systems are trading!
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Therefore, we can infer a few things about 9:30 AM EST opening:

1. Price is uncontrollable and unpredictable due to the various traders and various organizations
trading.

2. The reasons for trading the 9:30 AM EST opening are many, and they’re totally irrational.

3. News may be questionable, but reports almost never come out at the open. Therefore, we
cannot say that government reports have a push on the price action concerning the opening
price fluctuations.

4. Certainly the agenda of price manipulation is unknown of certain authorities.

Now that we have a bit of understanding about the opening price and why people stay away from it (or
why people trade, it more importantly), let’s look at some charts that show this unpredictability in
action.

How many people, brokers and fellow traders have told you, “Don’t trade the open”? The
reasons given are known: no one has a clue about what’s going to happen. But doesn’t the same hold
true for any time period in the market after the open? For example, how do you know at 10:00 AM
where price will go or be? You don’t, of course!

Take a look at the following charts indicating Opening Price Action. The Opening Price 9:30 AM is
unpredictable; it goes up, then goes down. Why did it go up? Why did it go down? I’m not here to
claim that I know those answers, but I will tell you that we need to use this data to our advantage.

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Example 1

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Example 2

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Defining Overnight Data
____________________________________________________________________________________________________________________________

Overnight can be different things to different traders. For example, if you ask traders when overnight
data begins and ends, you will surely get a few different answers. The truth is that all traders don’t
define overnight the same way.

For our purposes and for our methods, we will use overnight data as beginning at midnight,
when a new day begins: 12:00 AM EST

Not to be confused as 4:30 PM EST. This means that when the market closes at 4:15 PM EST, new
trading begins at 4:30 PM. Many traders and financial institutions label this as Overnight Data, New
Session Data, After-Market Data, or After Hours Trading. This is all true.

But we do not use this data. We only use overnight data and after-market data beginning at
12:00AM EST. So from now on, when I refer to overnight session, I’m referring to the data between
12:00 AM and 9:20 AM EST.

Here’s why:

Overnight data has very little volume compared to the day session. The day session begins promptly
at 9:30 AM EST and ends at 4:15 PM EST. Most of the moves are intra-day and that is where most of
the market makes its moves.

But we are in a world economy. In this economy, we watch Asia, Europe and other financial
instruments to determine how the U.S. economy will function. A meltdown in Germany will impact
the markets in the United States. Asian markets in the past have recently become so strong that we in
the U.S. are affected by what happens during their trading days, and vice versa.

Now that we know there is a relationship, let’s understand that the world operates in different time
zones. Our day session in the U.S. is the night session or overnight trading session in Europe and Asia.
And conversely, the night session, (overnight data and after-hours session in the U.S. markets) is
actually occurring during the peak, most volatile trading times of these other countries.

So to sum it up: while we sleep in the U.S., other countries and their financial instruments are moving
the world. And we know that these moves affect the prices of the U.S. markets.

Therefore, using this analogy and looking for price action in the process; we noticed that the E-mini
S&P and other U.S. markets are most volatile overnight—during the times that these other world
power economies are trading their day sessions: 12:00 AM to 9:20 AM EST.

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Below are some examples (Examples 2, 3 and 4) of overnight sessions and what they look like on
the chart. The left vertical line is the beginning of our overnight session and the right vertical bar is
the beginning of the day.
session.

Example 3

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Example 4

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Example 5

Now that we understand how overnight data is defined, let’s continue with the timeframe and chart
setup.

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Timeframe and Chart Setup Guidelines
____________________________________________________________________________________________________________________________

• The timeframe you should set up on your charts is 5 or10 minutes. Apart from any other
methods we teach, the “At the Open Trade” method is to be used with 5 and/or10-minute
charts.

• The Instrument we are trading is the E-mini S&P. Depending on your Charting software the
E-mini S&P can be found in you instrument data list and can be displayed in different formats.
Ninja Trader displays the E-mini as: ES 12-08 -- which represents E-mini S&P December
2008 Contract, or ES 03-09 -- which represents the March 2009 E-mini S&P contract.

• The settings should be 24 hours or Globex mixed with day session or continuous data. Trading
charts and software differs from vendor to vendor, but all work the same. The charts should be
set up like the ones you see in the examples, i.e. 24-hour continuous data for the contract month
you are trading in.

• In Ninja Trader, we can have vertical lines automatically placed where we want; the shortcut
key is F7. Please check your other charting software for this feature. One line is placed at
12:00 AM EST, the start of a new day, when the date changes as a reference and the second
vertical line is placed on the 9:25 or 9:30 bar Eastern Standard Time. (depending if you are
using 5 min or 10 min) These vertical lines give great visuals on the chart to show where the
trading day begins and ends. They also indicate when overnight trading begins and ends and
marks the spot on the chart for us to reference.

• If you live in a different time Zone other than NY Time; (Eastern Standard Time) which is
referred to in this course as the opening price of 9:30 AM, then you would have to apply the
time difference to the setup of your Charts. For Example if you live in California, which is
Pacific Time, you would calculate the market open not as 9:30 EST but at 6:30 AM Pacific
time which is your time Zone. The E-mini S&P would open for you at 6:30 AM coinciding
with those of us on the East Coast at 9:30 AM. For our International Clients living in Europe
who plan on trading the E-mini S&P, you would have to plot the opening Price of 9:30 NY
time EST, to your appropriate time zone which would be in the afternoon, and possibly evening
if you live in Australia or Asia.

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The 9:20 Opening price bar*

To begin -- we want to start on the bar that has the opening price of 9:20 AM EST. All minute bars
have an opening price and a closing price. We are using 5 minute and 10 minute charts. We want to
begin calculating price from the 9:20 AM opening price. The vertical line you place on your charts to
calculate our entries must be on the bar that begins at 9:20 AM regardless if you are using 5 minute
charts or 10 minute charts.

Example using 5 minute charts:

If you are using 5 minute charts, then you would begin calculating our method on the bar that has an
opening price of 9:20 AM and an ending or closing price of 9:25 AM.

Example using 10 Minute charts:

If you are using 10 minute charts, then you would begin calculating our method on the bar that begins
at 9:20 AM EST and ends or closes at 9:30 AM EST.

This is the first step. Find this open/close bar either 9:20 AM to 9:25 AM bar for 5 minute charts or
the 9:20 AM to 9:30 AM bar for 10 minute charts and place a vertical line on this bar.

For illustration purposes we are using candlestick bars. The bar opens at 9:20 AM EST and closes at
9:30 AM EST. This is very important to understand because we are using this bar 9:20 to 9:30 AM as
our first bar of the day (the day meaning day session or pit session). This bar, for our terms, will be
the OPENING BAR. The opening bar for our trading method begins at 9:20 AM EST and has an
ending time or closing at 9:30 Am EST. for the 10 minute charts.
Or on the 5 minute charts: The opening bar for our trading method opens at 9:20 AM EST and has an
ending time or closing at 9:25 Am EST. for the 5 minute charts. This is very important.

Whatever software you use, make sure you set up your charts in this fashion.

Important: On Ninja Trader, the timeframe printed on the bottom of the chart when using the
crosshairs (and when you place the crosshairs over the bar) shows 9:30 AM, but the bar actually opens
at 9:20 and closes at 9:30 (10 minute charts). The timeframe showing is a close price, not an open
price. This is the bar you must use to begin our method if you plan to use 10 minute charts.

Conversely with the 5 minute charts the actual bar denoted with the open – close 9:20 -9:25 will be the
bar marked 9:25AM. This is the bar you must use to begin our method if you plan to use 5 minute
charts to trade.

The following examples (Examples 6, 7 and 8) illustrate proper chart setup.

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Example 6

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Example 7

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Now that we have an understanding of the first bar, which I will refer to as the 9:20 bar, all future
charts for the “At the Open Trade” method need to be set up in the manner shown above.

Every morning, we place a vertical line at this 9:20 AM bar, the close at which is 9:25AM (5 minute)
or
9:30 AM (10 minute). When this bar closes at 9:30 AM, the rest of the trading community begins
trading the day session. Remember that we are starting with the 9:20 AM bar as our first bar of the
trading day for this method—but the rest of the traders are actually trading, or putting on trades on the
next bar (that bar being 9:30 open to 9:40 close).

Now our charts are set up in this manner: We have a 10-minute or a 5-minute chart, with a vertical
line on our first bar. The bar that opens at 9:20 AM and closes at 9:30 AM on a 10 minute chart or the
bar that opens at 9:20 AM and closes at 9:25AM on a 5 minute chart.

• At this time you should choose which charts to setup either a 5 minute chart or 10 minute chart.
It is very easy switch back and forth between the 2 time frames but for learning the method at
this time please choose one chart and stick with it. The illustrations in this course will
demonstrate both time frames. The Price Action Method you are learning is the same
regardless of the time frame you choose to begin with. Please follow closely the rules for
managing the trade later in the course. You will also learn the difference between the 2 time
frames and why you would choose 1 over the other.

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The Next Part of “At the Open Method”
____________________________________________________________________________________________________________________________

- Using the Price Action Method on a 10 Minute chart

We will wait until two more 10-minute bars post. This means we are using a total of three 10-minute
bars to open and close for our price action method:

1. The first beginning at 9:20 open to 9:30 close

2. The second bar is 9:30 open, closing at 9:40

3. The third and final bar opens at 9:40 and closes at 9:50

We are using these three 10-minute bars as our price action analysis. These three 10-minute bars will
give us enough information to allow us to determine how price will react in the near future.

We now place a second vertical line on the 3rd 10-minute bar.

Please set up your charts exactly like this. We use these two vertical lines as references to the next
steps.

Some examples of the three 10-minute bars (Examples 8, 9 and 10):

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Example 8

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Example 9

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Example 10

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By now you should have an idea of how important plotting these 3 bars is to our Price Action Method.
Placing a vertical line on the 1st and 3rd 10 minute bar is key for our visual reference. We are isolating
these three bars to be used later in calculating our Price Action.

- Using the Price Action Method on a 5 Minute chart

We will wait until 5 more 5-minute bars post. This means we are using a total of six 5-minute bars to
open and close for our price action method:

1 The first bar opens at 9:20 and closes at 9:25

2 The second bar opens at 9:25 closes at 9:30

3 The third bar opens at 9:30 closes at 9:35

4 The fourth bar opens at 9:35 closes at 9:40

5 The fifth bar opens at 9:40 closes at 9:45

6 The sixth bar opens at 9:45 closes at 9:50

We are using these six 5-minute bars as our price action analysis. These six 5-minute bars will give us
enough information to allow us to determine how price will react in the near future.

We now place a second vertical line on the sixth 5-minute bar.

Please set up your charts exactly like this. We use these two vertical lines as references to the next
steps.

Some examples of the six 5-minute bars (Examples 11, 12 and 13):

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Example 11

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Example 12

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Example 13

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By now you should have an idea of how important plotting these 6 bars is to our Price Action Method.
Placing a vertical line on the first and sixth 5-minute bars is key for our visual reference. We are
isolating these six bars to be used later in calculating our Price Action.

Now, the next step is to outline the highest high and lowest low of these bars.
These three 10-minute bars or six 5-minute bars will have the same high and low Values.
We use horizontal lines. You can use any type of horizontal line.

Remember, only the highest high and lowest low of these three bars will be outlined, as this is the
reference point we need to calculate the entry to our trades. Please see the examples below.

Example 14: Plotting the high-low

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Example 15: Another example of the plotting of the high-low

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Example 16: Another example of the plotting of the high-low

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Example 17: Plotting the high low of the six 5-minute bars

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Example 18: Plotting the high low of the six 5-minute bars

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Example 19: Plotting the high low of the six 5-minute bars

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Now we have the three or (six) bars outlined. We also have the highest high and lowest low of these
three or (six) bars outlined to show a range which we will use to set up our trades.

For the 10 minute setups

Next, we will wait until the third bar closes and posts. Once we have this information, the highest high
and lowest low of these three 10-minute bars, we are ready to proceed for our setup.

The setup comes when the range of the highest high and lowest low is penetrated and the first 10-
minute bar closes above or below that range.

Examples

For a buy setup:

On the 4th bar, price penetrates the high of the highest high, and the closing price is above the highest
high of the three 10-minute bars we are isolating; then we have a setup.

If the 4th bar doesn’t give us a setup (let’s say the price penetrated above and closed back down within
the range of the highest high and lowest low of the three 10-minute bars), we have no setup.

Now we are on the consecutive 10-minute bar (5th bar). Price action still needs to show us that it closes
above or below the initial range we have outlined.

A short setup is exactly the opposite:

Price needs to penetrate the lowest low of the three 10-minute bar range and close below it.

The closing price of the subsequent bar, whether it be the 4th, 5th or 9th 10-minute bar, must have a
closing price below the lowest low of the range.

We wait for the following 10-minute bar; always referencing the highest high and lowest low ranges of
the first three ten-minute bars.

Remember that the setup can be any 10-minute bar after we have our range determined.

We try not to trade this method after 12:00 noon EST although afternoon trades have been profitable as
well. Normally we will trade in the afternoon to recover losses.

Important: This is only a setup, not a trigger to enter a trade. We are not going long or short
based on this penetration alone.

Let’s see an example of this on the short side (Example 20):

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Example 20

Remember, this is not a trigger to take the trade. This is only a setup which will lead to entering
short the trade. Price closed below the lowest low of our range. We have a short setup to short the
market, but no trigger to enter the trade short. That is yet to come.

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Example 21: An example of a short setup

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Here is a long setup (Example 22, below); penetration of the range on the long side, the 5th 10-minute
bar closed above the range. Remember that it doesn’t have to be the 5th bar; it could be any bar after
the initial three-bar range.

Example 22: Long setup

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Example 23: A short setup. Price penetrated the range on the short side and closed below it.

The blue dot on the chart above (Example 23) is shown to mark the bar in which it penetrated. It is
only for visual reference.

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Another short setup example below (Example 24):

Example 24: Another short setup

Hopefully these examples are helpful in showing you the methodology of going short and going long.
We have selected charts that reflect consecutive days; they are not cherry-picked to show you only
days when these breakouts occur. These breakouts occur daily and are expected.

Note that these setups are only part of the “At the Open” method. We are not blindly going short or
long on these setups alone.

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The 5-minute setups are exactly the same except we are using a5 minute charts and referencing
the same 9:20 AM Open to 9:50 AM Close time frame.

For the 5 minute setups

Next, we will wait until the sixth bar closes and posts. Once we have this information, the highest
high and lowest low of these six 5-minute bars, we are ready to proceed for our setup.

The setup comes when the range of the highest high and lowest low is penetrated and the first 5-minute
bar closes above or below that range.

Examples

For a buy setup:

On the 7th bar, price penetrates the high of the highest high, and the closing price is above the highest
high of the six 5-minute bars we are isolating; then we have a setup.

If the 7th bar doesn’t give us a setup (let’s say the price penetrated above and closed back down within
the range of the highest high and lowest low of the six 5-minute bars), we have no setup.

Now we are on the consecutive 5-minute bar (8th bar). Price action still needs to show us that it closes
above or below the initial range we have outlined.

A short setup is exactly the opposite:

Price needs to penetrate the lowest low of the six 5-minute bar range and close below it.

The closing price of the subsequent bar, whether it be the 7th, 8th or 9th 5-minute bar, must have a
closing price below the lowest low of the range.

We wait for the following 5-minute bar; always referencing the highest high and lowest low ranges of
the first six 5-minute bars.

Remember that the setup can be any 5-minute bar after we have our range determined.

We try not to trade this method after 12:00 noon EST although afternoon trades have been profitable as
well. Normally we will trade in the afternoon to recover losses.

Important: This is only a setup, not a trigger to enter a trade. We are not going long or short
based on this penetration alone.

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Example 25: Short setup example

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Example 26: A short setup that took a little longer.

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Example 27: Long setups with false breakouts preceding our setup. Notice how many times price penetrated and
closed back into the range. These were all false breakouts and we need to see a close below the range for the setup to
become valid. That is Price Action at its best.

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Example 28: A short setup that took a little longer.

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Please be aware that on some days, the setups are not hit. In other words, price will bounce back and
forth and will not close above or below the highest high or lowest low. That is fine; it would otherwise
keep us out of losing trades. This is a good thing. These days do not happen often, but when they do,
we are glad we weren’t in a trade being whipsawed back and forth.

The next step is very important: Entering the Trade.

The Trigger to Enter Short or Enter Long

____________________________________________________________________________________________________________________________

Once our setup has been validated, we know the direction in which we want to go. If it’s a long setup,
we go long, and if it’s a short setup, we go short. The same applies to either the 10-minute or 5-
minute.

The question is where, and at what price?

Most people would go short or long at the breakout, thinking price is going to continue up or down.
They are wrong. Price never follows a vertical line up or down; it ranges. Obviously, I’m not saying
that breakouts are invalid, but trading them alone has not been validated as a true profitable method.

How many times have you traded thinking that price would continue in a certain direction, only to
have it come right back down and stop you out? It happens to everyone, so why trade that way?

Most people would also have you believe that trading breakouts—and having them close above the
range as in our setup examples—is the way to go.

Those people are also wrong.

Price does sometimes continue further up or down, but for the most part it retraces. It likes to go where
it’s been.

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Enter the “At the Open Trade”
____________________________________________________________________________________________________________________________

We will go long or short based on the setup of the range being penetrated and price closing above or
below it, but at a much better price—the price at which the professional traders and their infinite
patience enter.

The range that we created (the highest high and lowest low of the first three bars) is very important. It
acts not as support and resistance, but as a fulcrum. Price travels to where it has been before; to where
it is comfortable.

Why not go long at the highs or go short at the lows? Because that is uncharted territory and nearly
guarantees disaster. With volatility the way it is, it’s downright crazy! There is no way to trade
profitably in uncharted territory.

Instead, let’s be smart. Let’s be patient. Trades are available every day; choose the ones that will
give the highest percentage of accuracy. Trade with the pros—not with the herd of cattle!

The Trigger
____________________________________________________________________________________________________________________________

If we have a long setup, price penetrates the highest high, stays there and closes above it. We will go
long at the highest high range which was just penetrated.

So all the lines you placed on your chart—vertical and horizontal—provide not just visual reference.
Rather, the horizontal line acts as a buy, and you would go long on a long setup at that same price.

After price penetrates and closes above our highest high or lowest low of our Price Action time frame
of 9:20 AM – 9:50 AM regardless of the time frame you decide to use,
We immediately place a limit order to enter the market at that highest high / lowest low range
(horizontal line plotted) as our entry price for going long or short the market once our setup is
complete.

Price needs to retrace to that level after closing above/below it. Wherever the setup occurs is irrelevant.
Price must retrace to wherever the highest high range is or lowest low range is after the setup; that is
your long or short entry and trigger.

Long and Short Setup and Trigger Examples

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Let’s see some long setup examples. We are entering long at the red line (highest high plotted) and
waiting for price to retrace back to it on the following bar after our setup has occurred.

Example 29: Long Setup and Trigger on 5 minute chart

In this example above (Example 29), we went long after price validated our setup. You would have
gone long at the 10:15 AM bar (11th bar) and pulled anywhere from 2 to 4 points.

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Notice the price action. Price immediately comes back down after the setup was validated. The long
trigger was hit at 870.75, and profits were immediately taken.

This type of price action is very common. This is how the pros trade: fast—in and out.

Example 30 is below showing a short trade setup and trigger.

Example 30: Short Setup and Trigger on 5 minute chart

Example 31 below is an example a day where both long and short trades occurred before noon
and both were winners!

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Example 31: Short Setup and Trigger on 5 minute chart and Long Setup and Trigger on the same day!

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Example 32: Short Setup but no trigger occurred to enter the market.

Keep in mind that sometimes price does not retrace as in the example above. That is ok. We
didn’t miss anything because we didn’t lose anything. Price action may not come back or not pull
back far enough. This occurs once in a while, so if it does, don’t push a trade. Tomorrow is another
day.

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Example 33: 10-minute chart short setup and trigger

In this short example above (Example 33), our setup was hit on the 4th bar. On the next bar (5th bar ),
price went up to fill us short on a limit, and away we went for instant profits.

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Example 34

It doesn’t matter how far price is from setup to trigger. Follow the rules. Price can retrace 10 points;
these are volatile times. Don’t enter early—enter right.

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The setup was valid and the trigger price to sell short was hit. Profits were taken a few bars later. The
goal is to be done trading by noon and to be consistent day in and day out.

Example 35: A great short trade once again. And done by noon.

Again, let me remind you that on some days, the trigger is never hit. This is to be expected, especially
during days of reports and news events that create unprecedented volume.

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Frequently Asked Questions
____________________________________________________________________________________________________________________________

Q. Why does the “At the Open” method focus on being done trading by lunch time?

A. Morning trades are best. Our intent is to catch the morning move for 2 to 4 points and be finished
trading. Here is a rule of thumb to keep in mind: If the trade does not trigger or a setup does not occur
by 12:00 noon, make a decision whether or not you want to continue trading, or be finished for the day.
The longer it takes for a retracement to occur, the worse the chances are that the trade will work
positively. We do take afternoon trades because they do work. The preference to not trade the
afternoon is your decision. We try to keep it simple and try not to over trade.

Q. What makes the “At the Open” method unique as a trading methodology?

A. The “At the Open Trade” method is very profitable. The entries are precise. There is very
little question as to whether or not to enter the trade. Most trading methodologies have a variant, and
they are entirely subjective. But not At the Open Trade. If the setup is valid, place a limit order where
the trigger is, and in the direction of the breakout. There is very little discretion about entering the
position correctly.

Q. What timeframes should I use--5 minutes or 10 minutes?

A. I have been using the 5-minute charts. Whether I use the 5-minute charts or the 10-minute charts
(as I have shown in the examples above), there really is no difference in the way they are traded.
Sometimes they both give the same signal. I prefer the 5-minute charts, although the shorter the
timeframe, the more possibilities for false breakouts. The 5-minute chart works in the same manner as
the 10-minute chart for entries. The setups are the same. Remember that we still have to wait for the
9:20 until 9:50 timeframes high low to finish setting up. This would mean a total of six bars in the 5-
minute timeframe as opposed to three 10-minute bars to calculate the high/low segments.

Q. What are the stops and profit targets?

A. We use a 6 point stop initially when we enter the trade. As soon as price begins to go in your favor
you should move your stop to 4 points. Manage the trade accordingly. Ninja Trader along with other
charting platforms automates the exits buy placing exit orders both on the stop and profit sides. This
means that you will get the best fill. Check with your charting software for this feature, or place the
orders manually if you must. But place them regardless.

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Important Trading Guidelines
____________________________________________________________________________________________________________________________

1. Handling Losses - What to Do if You Get Stopped Out

Face it: you are going to get stopped out; it is inevitable. How you manage the trade is what will
constitute your success in using this method. If you do get stopped out, here are some guidelines for
what to do next:

• If you get stopped out, you need to take the next trade. If the timeframe you are using is 10
minutes, then take the following 10-minute trade in the opposite direction or in the same
direction of the loss. Sometimes price and volatility are just too much and your stop is hit.
We will wait for the next trade even if it means trading in the afternoon. To recover from a
stop loss we will take then next trade regardless of when it will trigger.

• If you are trading using the 5-minute chart, then take the opposite signal in the 5-minute chart.
And only take the signal in the same direction that stopped you out on the 10-minute chart.
The reason is that we want to avoid false breakouts in the 5-minute chart, since this occurred
already. We may have to wait until the afternoon for this to occur.

• Wait for the setup and trigger. This can occur any time, even after 12 PM EST, but not after
3:45 PM EST.

Sometimes the market just pulls back too far. That’s reality. Take the next setup and trigger. Trade
the method regardless of what you may think. You can recover at least half of your stoppage points
within the same day this way. Manage your trades wisely.

The stops need to be at least 5 to 6 points. I use 6-point stops.

Stops are very important. Can you trade with a 1-point stop? Frankly, NO! Those so-called “gurus”
who point you in that direction are killing your account with a million cuts. I’m not suggesting losing
all your money on one trade, but what I am suggesting is that your stop needs to fit your trading and
account size, and lots traded.

We recommend trading the stops as large as you can handle. Not 20 points, obviously, but not 1.5
points either. It doesn’t work. The markets are volatile and need to breathe. With the current
volatility the way it is, a 6-point stop must be used.

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Parabolic Indicators as Stops

Some clients use a parabolic indicator as a stop. I think that is a very good idea. In that case, the inputs
would be a little different. They are: Parabolic SAR (0.02,0.3,0.07). These have worked best and we
often use them, too.

Every charting software program has a parabolic indicator; you should be able to use it for stops if you
feel comfortable with this method.

2. The Exit Strategy—Taking Profits

The discretion is on the exits. I say this because we use this trade to be done by lunch time. No one
wants to stare at the screen and be in a losing trade all day. That’s not what trading is all about.

The exits are as important as the entries; after all, we want to take our profits. In this course, I will
provide two exit strategies that have historically worked well. I would like you to explore an exit
strategy that you’re comfortable with.

After teaching many traders this method, we came to the conclusion that traders are all looking for
different things. One thing is certain: they want to know how to get in and be profitable. But the level
of risk and profits go hand and hand.

Most of the traders we work with are happy with 2 points, in and out and done. No mess and no
damage control. Other traders see opportunities and want to take more out of the market. They see the
potential for 4 points daily and aren’t satisfied with 2 points.

I am happy with 2 points daily and being done by lunch time. The rest of the day is mine.

So in summary, here is my advice regarding your exit strategy:

Enter a 2-point profit target once you’re in a trade. Ninja Trader can automate this very easily as do
other platforms. If you’re happy with 2 points daily, then you’re done.

If you want more, let me suggest a method where you still have 2 points of profit on half of your
position, and the other half of your position is peeled off at 4 points. This gives you a little more action
for the money, but it is not as conservative. What do you do if your 2 points are hit on half, and the
remaining half goes against you?

One method is to place a stop at entry so you don’t lose what you’ve gained, or place a stop on the
remainder of your position 2 points below your initial entry. If stopped, this will give you $0 profits
for the day and $0 losses, essentially a scratch trade. This does give the market more wiggle room to
move up and hit your 4 points.

At The Open Trade Page 53

3. Never Let a Profit Slip Away
What I mean is that if your 2-point profit is tagged, or 1.75 points is tagged and price action just keeps
on hitting more than once or twice and you are not getting filled, this is an indication of the price
action not having enough power to bust through and fill us. This does occur, and once you see price
action behaving this way, you will realize that the push is not there to fill our profits.

In my experience, I have seen this happen one too many times. So with that in mind, I have decided to
include this commentary in the course.

I do not want to see any trader fail. In fact, my goal is to see average traders succeed in this crazy
venture of daytrading. So when the above circumstances occur and you see that you are not getting
filled—by one tic away or tagging your profit target of 2 points and bouncing off it—my advice is to
get out at market.

If the method is to work it will work, but if it lacks that extra push to get you filled by 1 tic, I say leave
the tic on the table. Take your profits at 1.75. Trust me on this; I have seen this occur and instead of
taking the money and moving on to the next trade, the trade turns into a loser. This is something I
wish on no one. If you see price action behaving in this fashion, do yourself a favor and leave the tic
alone. My advice comes with a history of firsthand experience!

We know where to enter, and we know that we are correct a very high percentage of the time as far as
market direction. Most of the time, the market gives our profit within the next 5 or 10-minute bar.
Sometimes it takes longer as the market makes its way into our profit.

Some Parting Words…

____________________________________________________________________________________________________________________________

Experiment on your own. Keep the stops wide, at least 6 points.

Take your 2 points and be done; the less you trade, the better. Our clients have been trading the “At the
Open” method for some time now and are very happy. The direction is right and they are not greedy.
Some clients have reversal stops and some clients have 6-point stops. Just use your risk tolerance to
determine what you can afford to lose per trade.

I hope you’ve found this course to be both enlightening and a valuable tool in your efforts to trade
more wisely and more profitably. We cordially invite all questions, comments and general feedback to
support@daytradetowin.com.

Good trading!

www.daytradetowin.com

At The Open Trade Page 54

 Disclaimer

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN

LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT
REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE
RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN
MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF
HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY
TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

GOVERNMENT REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE

METHODS MAY HAVE WORKED IN THE PAST, PAST RESULTS ARE NOT NECESSARILY
INDICATIVE OF FUTURE RESULTS. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO
A RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH TRADING FUTURES CONTRACTS
CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH
TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION SINCE ALL
SPECULATIVE TRADING IS INHERENTLY RISKY AND SHOULD ONLY BE UNDERTAKEN BY
INDIVIDUALS WITH ADEQUATE RISK CAPITAL.

ANY ADVISORY OR SIGNAL GENERATED BY DAY TRADE TO WIN IS PROVIDED FOR

EDUCATIONAL PURPOSED ONLY. ANY TRADES PLACED UPON RELIANCE ON
WWW.DAYTRADETOWIN.COM SYSTEMS ARE TAKEN AT YOUR OWN RISK FOR YOUR OWN
ACCOUNT. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. WHILE THERE IS
GREAT POTENTIAL FOR REWARD TRADING COMMODITY FUTURES, THERE IS ALSO
SUBSTANTIAL RISK OF LOSS IN ALL TRADING. YOU MUST DECIDE YOUR OWN SUITABILITY
TO TRADE OR NOT. FUTURES RESULTS CAN NEVER BE GUARANTEED. THIS IS NOT AN OFFER
TO BUY OR SELL FUTURES OR COMMODITY INTERESTS.

At The Open Trade Page 55