The headfakes we saw at the open this morning virtually across the board serve as a good reminder for a concept we discuss inside the 12631 Trading Service all the time; Resisting the urge to put on swing trades within the first thirty minutes of the opening bell.
An important thing to remember as a swing trader is that liquidity is low and price swings are particularly high during the opening thirty minutes of trading, as traders feel each other out. This time period is often referred to as the “Wild West,” because gunslingers looking for quick scalps are the main players, in addition to our high frequency friends, of course. Thus, I usually find it constructive to wait out the open and allow the session to take hold.
Developing this habit allows you to refine your patience, detach emotion, and avoid getting swept up in chasing a trapping market higher after exuberance on Sunday evening.
As I write this, I see bulls are making an attempt to support intraday lows. We of course remain in an intermediate-term uptrend. the type of action we have seen over the past week or so smacks of increased indecision which likely means no trade is the best trade unit defined resistance or support levels are meaningfully breached for more than an hour or two.
