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This question is not specifically about the tools I use, but it's on trading strategies on the ES. So I placed it here rather than on a NinjaTrader forum.
I am using NinjaTrader, BloodHound, Blackbird, and primarily Lizard Indicator/Lizard Trader free and premium indicators. I also have the NinjaTrader Multi-broker platform, so I can trade multiple accounts. I currently am developing strategies only for the ES/MES on the 5-minute timeframe.
I have developed 3 primary strategies- one is based primarily on the Opening Range indicator, and trades the 30-min Opening Range breakout. The second is based primarily on the Auction Bars indicator, and primarily trades ranging markets and price reversals. The third is based primarily on the MACDBB and Ichimoku indicators, and is a trend following strategy.
Each strategy trades a specific market type, but there is some overlap in these strategies. For instance, the Auction Bars indicator often signals a price reversal before the 30 minute breakout. It also often starts a trend which continues after the opening range breakout. Price reversals may lead to trends in the opposite direction, etc.
My biggest challenge has been deciding in real time which strategy to use. Does it make sense in this situation to trade the three strategies simultaneously, so one sort of hedges the others? Do any of you do something similar?
That's my million dollar question... how to take an educated guess at the type of day/ direction of the opening range.
The past month I've switched to only trading the first 30 minutes of ES, 930 - 10 est. The majority of times, the ES will make large moves in the first 10 minutes.
But what to look at to make that educated guess? Others have recommended auction market theory and price action to determine the bias at open.
Idk if trading all 3 strats as hedges would have a positive expectancy. But with micros it's cheap enough to keep throwing at the wall and see what sticks.
Thanks for the reply. When you say you are only trading the first 30 minutes, do you mean that you are closing your position at 10:00, or that you are only entering trades in the first 30 minutes?
Price action I understand. And Auction Market theory on some level is involved with the Auction Bars indicator I use. I have noticed that the indicator often shows reversal trades during the first 30 minutes, or sometimes shortly before the open. These reversals seem to often set up the first leg, but that's just a subjective view. I haven't back tested this indicator on that timeframe yet.
Primarily trying to only enter trades in the first 30 minutes, but typically its closer to the first 10 minutes.
I don't automatically close the position at 10, but ES moves alot in the first 30 minutes, so typically the position does end up being closed before 10 because I think it is starting to reverse.
For me entering in the first 30 minutes is very appealing for multiple reasons.
-Often times the entire day's range is in the first 30 minutes
-There is never scheduled news release between 930-10. Sometimes at 10 there is an economic release, but never between 930-10. Don't have to worry about a scheduled release that whip saws the market +-10 pts and takes everyone's stops out. Also I've noticed than on days when there is a release at 10am, the market often drifts into the direction that the report will have after the whipsaw.
-Fewer S/R levels from overnight + early morning to trade around, making it easier to take an educated guesses. After 11am, there's been so many swings/pivots making it more difficult to predict where the market is moving, in my opinion.
-Less screen time. Nothing good has ever come from me trading all day 9:30 - 4. The typical outcome of trading all day for me was giving up profits from the opening, or digging deeper into the hole.
My process is to launch the platform around 9:20am, and guess if it's going to be what I call a range open or a breakout open.
A range open is where it bounces between some support/resistance zones a couple of times, before breaking out into a direction. After the breakout, the price can reverse or continue. This all happens before 10am.
A breakout open is where the price immediately moves in the breakout direction, never to be seen again during the first 30 minutes.
Today is an example of what I'd call a breakout open with traps. Although the real breakout did not happen until 9:35, so really more of a hybrid range breakout open. I recognize this may not make much sense to someone reading this, but it makes sense in my mind!
Yesterday (7/8) was more of a true breakout open.
That's all I'm doing. Trying to master trading the open. I've noticed that the market reacts to S/R levels differently after 11am, versus at 9:30. A problem I had was applying the same trading method to the entire day. But I've learned that the market does not trade the same at 9:30 as it does at 2pm. Now that I'm laser focused on just the open, my progress has been much stronger and it is reflected in my PnL for July. But there also haven't been too many trading days yet in July, so only more days will tell.
At 9:30 thought it would be an open breakout, but the stop loss would be too wide for me, so decided to wait.
And between 9:30 - 9:35, as it does more than 50% of the time, it bounces between S/R, and at 9:37 picks the real direction.
So today was a range breakout.
I feel it is so much easier focusing 100% of my attention at how price moves between 9:30 - 10
I traded it like I do everyday, but I'm still developing my own methods so it might seem inconsistent. In this case, I should have just let the stop loss trail a tick below the previous bar, and would have captured more profit. Also simming a shadow strategy to scale into a 2nd contract when the breakout is confirmed.
Edit: After this screenshot, there was another reversal at 9:50. This is another common time for the final reversal, but waiting for and/or trading this one is much more inconsistent vs. gong for the one between 9:35 - 9:40.
But overall, look at those nice price swings between 930 - 10. Why trade all day when I can just focus on this time.
I use the premium version of the indicator. If you don't have it yet it is useful because you can set profit targets based on measured move objectives of the height of the opening range. I set my stop loss at the mid-point of the range, and my profit target at 100% of the height of the range. Kris Lassen of Lizard Trader has tutorial videos on the website.
I have been tracking and live sim trading the results for a rolling 90 day period. The results have been >60% profitable with a profit factor of approximately 1.3 to 1.4 depending on the entry order used.
I am also working on a reversal strategy for the 40% of days when the breakout fails.
