7 Jul

The Last 5 days In Review Of Range Breakouts

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The first and last 30 minutes of the trading day is known to be the most volatile and demanding for a trader to deal with.

That’s why I’m often careful before jumping into my trade of the day.

Because If you think about it, the markets will either go up or down.

You have a 50% chance of winning when trading stocks… but when you buy options it’s actually only 33% when you factor in a sideways market

So why take your chances at the casino by trading the open without an edge?

Instead, learn to leverage the power of the 30 minute range breakout for trading the open like I do for Daily Deposits.

Now if you don’t know what the 30 minute range breakout is, let me show you a few tricks that I use every day to gain an edge against the markets. 

 

Daily Deposits

 

The strategy deployed using a proprietary blend of pre-market indicators to target and execute on momentum throughout the trading day.

Strategies that follow the trend are easy to follow, simple to trade, and can generate mind-blowing returns without breaking a sweat.

Daily Deposits come with 3 key indicators to determine what the market could do once the stock exchange opens 

The 3 key momentum indicators are:

  1. Price action and volume
  2. Moving averages confirm trend
  3. TTM Squeeze

Let’s take a look at how to correctly use these three pre-market momentum indicators to determine the direction of the markets before each trading day.

 

Pre Market Analysis

 

Let’s break down how I use the pre-market analysis every morning to make my trading decisions.  

I monitor everything coming across the markets so you don’t have to. I take in the good news and the bad, and make sense of what I am seeing from my years of experience.  

I do this to make sure that I don’t go into the trading day and miss news. 

I start with what’s happening in the Asian markets, European markets, and then the U.S. pre-markets on the e-mini futures.

 

Hourly Breakdown

 

Here is the hourly breakdown of the pre market review I go over every morning.

7:00am:

I scan every market from:

  • Foreign Exchange
  • Economic Data
  • Commodities
  • Asian markets

Why?

I want to get the entire picture of what the markets are doing coming off of the overnight hours.  

9:05am:

Once all of the premarket review is done the next thing to do is find the contracts and strikes to trade the SPY.

And I send a Trade of the Day alert signaling the direction I believe the markets are going to head in at the open.

The Trade of the Day includes:

  • The option contract (put or call) to trade
  • The specific week or month
  • The specific strike price
  • The entry price of the trade
  • The stop loss of the trade
  • The profit targets of the trade.  

Fundamentals

 

It’s important to remember that fundamental help to determine the direction of the markets more than technical analysis does.  

At first, it might seem odd that a day trader would care about the macro market signals of the markets.

But most of the time, fundamental factors can drive the largest move in the markets.

Let’s take a look at what I use to get ahead of the markets every day.

2 Key Fundamentals To Watch:

  1. Macro Indicators 
    • Currencies – Equities have an inverse relationship to the Japanese Yen
    • Bonds – Equities have an inverse relationship to bonds
  2. Market Sentiment 
    • US futures markets
    • Overseas futures markets
    • Commodities – Oil, gold, copper, etc

Technical Analysis

 

On top of all of the fundamentals, monitoring the markets using technical analysis is a must for making huge returns while trading.

This is where the real trade information comes from.  

And with technical analysis, you get your buy levels, sell levels, stops, targets, and position sizing information.  

Here are some of the momentum tools that I use on a daily basis:

  • 10 and 20 SMA
  • TTM Squeeze
  • 5 min, 10m, 15m charts

Now that we covered the pre market analysis, let’s take a look at how the 30 minute range breakout setup works.

Now that you have the major trend identified and the other sources of momentum outlined, the next step is to confirm this trend and enter the trade.

And that’s where the technical indicator that looks at a range breakout is incorporated into the pre-market momentum strategy.

 

Directional Bias

 

From the pre-market analysis that was done earlier, the trade is inherently biased to the short side. 

There are many criteria that go into creating directional biases, but for the Daily Deposits, we will be focusing on the technical indicators to give us what we are looking for.  

Here’s an example of the trade on the SPY:

 

Source: Thinkorswim

 

And as we can tell, once that 30-minute range is officially broken the markets picked up upward momentum and closed near the highs!

Here’s a checklist for trading an opening range breakout combined with market momentum

  • Have a bias:  Long/short/none.  Don’t take a direction if you don’t have a supporting bias from the overnight session.
  • Establish your bias:  Base on daily, 15 min, and 5 min chart price action and pre-market momentum
  • Trade in direction of the breakout and your biased direction
  • Never be afraid to call for a change of plans (audible alerts!)

Now… let’s take a look at this stellar track record over the last two weeks.

 

Two Weeks In Review

 

Now let’s review the past week with trading the 30 minute range breakout signal by itself.

I know this isn’t what will happen, but here’s the power of the indicator and how it can stand on its own.

 

Source: ThinkOrSwim

 

From looking at this chart above on the SPY’s, you can see the power of the 30 minute range.

From left to right, the breakout saw a win, win, win, win, loss, win.

The range breakout was successfully able to trade 5 out of 6 prior trading days.

By looking at this non-standard technical analysis tool, you were able to predict over 80% of the price action.  

 

Wrapping up

 

This is one of the most reliable systems for a trader to trade the markets based on premarket futures and momentum indicators.

This is so effective it completely reduces the need for any complicated day trading strategies!

So if you’re looking for a simple and consistent way to crush the markets….

Click here to join Daily Deposits today

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