This opening range theory is really tickling my fancy. Here’s this morning’s Tokyo Opening Range.
A couple of things I’m looking for, the previous day’s High and Low are really strong zones of Support & Resistance, I’m always looking for an excuse to buy at yesterday’s low or sell at the high. Adding to this, is waiting for a pullback and a No Demand or No Supply Candle.
This coupled with an opening range breakout, I’m considering betting the house on this!
Pic attached. There’s a lot of Pete’s VSA in here aswell, it’s a setup to lookout for until a madscalp comes along.
I’ll try not to confuse with the GMT session times, as I’m in GMT+8, my mt4 broker is in another timezone and my execution broker another! Let’s take Australia as the ‘start of the day’ at zero.
0 - Australia
+1 - Tokyo
+6 Frankfurt
+7 London (but I don’t use this session as an opening range)
+12 New York
You can refer to the bottom right hand side of forexfactory.com for the session opens, but for some reason their Australian Open is wrong.
For profit targets, I use the “next” level of Support & Resistance, In this instance I used around 170.465, always ‘below’ the S&R for long, and above the S&R for shorts, as the lines (grey lines) are ‘zones’ and not hard fixed prices.
Once I’ve set the S/L below the swing low in this case, got my entry point and my TP, I like to check that the trade will offer atleast 2:1 R:R before entering. Hope this helps!
A couple of nice entries available this morning on AUDJPY from the Opening Range. I thought I’d post something about assessing trade opportunities for multiple pairs at a session open.
I don’t believe in ‘indicators’ as such as a predictive method, but the Opening Range and Support & Resistance are logical to me. The image below show Murray Math S&R, and the Opening Range. The theory being:
Don’t Buy or Sell into Support & Resistance, they’re S&R for a reason. Look to the opening range breakout to provide a bias, look for buys above the OR & sells below. Buy from the previous day’s low, sell from the previous day’s high.
With these three things in mind, you can identify the ‘areas’ on the chart of clean trading opportunity where there shouldn’t* be too much resistance in the trade moving to a profit target. Any suggestions or critic more than welcome please. I’ll post the AUDJPY chart next.
Noting the S&R, OR & Previous day’s high and low from the previous post, there’s an area that’s tradable above the opening range, where there isn’t any S&R to get in the way of profit. Price should move freely here.
Opening range break bullish, so I’m looking for longs. That first pin has huge volume, and the big take-away I’ve learnt from Pete’s VSA thread, is that huge volume should make you cautious (and more than likely expect a reversal).
Price comes back down to the Opening Range, which is also a zone of S&R, a nice No Supply candle to fade above. At ‘2.’ again the same thing, a test of the top of the opening range, nice no supply setup to fade above.
I’m liking these opening range setups more and more. Something to keep an eye on until price trends and some true madscalping can kick in as per post #1 of this thread. Any thoughts or improvements more than welcome!
Thanks for the charts Ninja - very clear and well explained.
Getting back to session times, I’m sure you’d agree that if the theory is based on an opening range of a session start time, that start time should coincide with the country’s market bell.
Please note that I’m not confusing this with GMT zones or DST offset. The wikipedia link has a helpful UTC column for standardisation.
According to the resources above, your chart here is marked with Tokyo open at 03:00 whereas it should be at 02:00 (for this broker) and therefore the Sydney Open should be at 01:00 (technically 00:50) and not at 02:00 as it is here.
I realise it might sound like I’m nitpicking, but please don’t take it as that. Clearly what you’re doing is working - which is obviously what’s important and appreciated.
Feel free to check me on the times - GMT, DST, UTC and related offsets have always been in pain in the &^% to me.
If I am correct regarding the times, I’m curious for your thoughts on why it works even when the candles you’re drawing aren’t opening candles? Perhaps it could be because of being the opening candle of an hour, or alternatively, it is defining an arbitrary no-man’s land as you appropriately put it and playing breakouts from that area - which could theoretically be done anywhere, given sufficient volatility and space to nearest SR.
I see what you’re saying but I disagree on the Tokyo Open, my chart is inline with the opens on forexfactory and fxstreet? The only contentious one, is that “no where” online seems to agree on the Sydney open at the moment, as there’s a bit of confusion with Daylight saving.
So my tokyo open is the opening range, the volume spikes right on the bell. The time’s I put on my previous post can shift, that’s why I gave Australia as 0 hours. It could be 2, 3, 4 etc… as long as the tokyo bell is 2 hours after, 6 hours after that is frankfurt, an hour after that is London etc…
Session times are going to be a confusing beast as we’re all around the world and each broker (not helpfully) seems to be different.
Opening range breakout pullback from the Australia Opening Range (could have chanced an entry here),
168ema, 50ema, 14 ema all uptrending prior to Open,
Breakout of Tokyo OR but previous day’s high (strong zone of sellers above),
Like to see a big move through Previous day’s high,
Entry
Wait for price to get near the 14ema (blue line) to get maximum value for your entry,
Look for a lack of supply w.r.t. volume,
Fade entry above a bearish candle,
Stop Loss below recent swing high,
I’m going to let this trade run a bit as it’s with the trend, possibly to the next S&R Murray Math line.
I also keep an eye on AUDUSD and AUDJPY, the reason I wasn’t bothered with AUDUSD this morning was because it the Tokyo OR was too close to yesterday’s low, providing too much support (buyers) for a breakout short. AUDJPY was range-bound at the open but has since broken out nicely.
A quiet Euro session (for the EU pair anyway) yesterday due to the bank holidays, GBP moved ok but the pick of the bunch for madscalping was the Aussie.
Here’s this morning’s opening range break, I’ve got two charts up here, I look at the A/U, U/J and E/J. U/J and E/J are the same move in the morning, but you’ll get a different amount of breakout, different levels for yesterday’s high and low, and slightly different Murray Math Support & Resistance, so pick the pair that breaks out cleanly, has the best R:R, isn’t trading into S&R or yesterday’s high and low.
So in saying that, the USDJPY pair on the left was a nice breakout this morning from the opening range (the grey shaded box). I faded an entry above the second bearish candle, took profit inside yesterday’s high (Red Line).
Happy Hunting! I think I’ll start a new thread (possibly) and stop posting here, as this madscalping should be just for Pete’s rules set out in post #1. Cheers!
Tremendous idea!! I for one would love to participate in that thread.
One of the things I’d love to learn more about is your stop placement and resulting R:R.
Personally I’ve always found it difficult to place a stop at an arbitrary distance from an entry especially if it’s in excess of 5 pips from the bar high/low. I prefer 1:2 r:R ratios even if the hit rates are accordingly lower and of course something like a 20 pip stop on M5 bar seriously impacts the r:R negatively - especially if the target is always ‘next SR’ which given BRN’s, MMs, SR’s etc is always just around the corner.
With this (the daily OR) you seem to have good hit rates - whether that is assisted by a ‘looser’ stop or good experience in pair selection I’m not sure - possibly both.
In any event, whether you prefer to discuss this in a new thread, or here, you have my support.
Best,
Ayden
PS - My suggestion for a topic in the new thread would be a basic discussion/explanation of volume formations you use. You might lose readership if they get directed to other, giant, threads to learn basics first - especially if only a basic foundation can get them by for this method - if that is the case of course.
If you are looking at the madscalping and need some breakouts etc to trade. Obviously the EU etc are a bit slow of late, but if you can trade indicies, the DAX is absolute heaven at the moment. Haven’t looked at it for the MS method, but I think it would be quite suitable. Spread on my broker as low as one pip (IC Markets)
Here’s a breakout that led to a traditional MadScalp entry as per post #1. I’ve got the USDJPY pair and EURJPY pair side by side, as they’re the same movement, but one offered a better entry.
I’ve noticed that EJ and GJ have bigger swings than their EU and GU base pairs, and in the morning EJ has bigger swings that UJ. On the image above, it’s the same price movement, with EJ offering a better (imo) pullback for the 14 ema, wait for a no demand bar, and fade an entry below that.
The large move down was met with a good bit of buying volume, so my target is above the pin of the large down bar.
