This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I only took one trade today, since I had a full schedule of other garbage (aka work) to do, and didn’t have time to watch the markets past about 11 ET. My trade was in LEH, which was poised to gap down at the open. I entered in premarket trading, anticipating a larger selloff on the open. I’ve noticed this phenomenon by watching gappers move further in the direction of the gap in the first bar. My play was always to enter on a reversal after a retrace, as a Trader-X or Jamie style setup. This time I decided to play the first move. My entry is the orange line, and my stop was 2 cents above the premarket high. I covered half at the light blue line, and moved the stop on the rest to breakeven. I hoped to get the 138% fib extension, but LEH quickly retraced back to the open and stopped me out on the other half.
LEH made it to the 119% fib at the close, but I was long gone by then. In the end I made +1R on the trade, and fairly comfortably as my trade was in the black from the open onward. Since I discovered that I can trade outside of market hours with my prop firm, I’ve been looking for more trades like this. Nice to start out with a win first thing in the morning. :)
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
