The Daily Open strategy is one that migrated from the stock market into the cryptocurrency market.
However, many traders in the cryptocurrency market are inexperienced and unaware of these methods.
This strategy requires patience and observation during the beginning of a daily open.
Things you will need to look out for are; Price action within the first hour, volume and strength.
But there is one important detail to note; the cryptocurrency market is a 24/7 market.
So the Daily Open occurs at 00:00 UTC time each day.
This tutorial elaborates on the above and also provides examples of three methods.
Whether you trade the Daily Open or not, there is still much to be gained from observing the opening session.
The Daily Open strategy is one that migrated from the stock market into the cryptocurrency market.
However, many traders in the cryptocurrency market are inexperienced and unaware of these methods.
This strategy requires patience and observation during the beginning of a daily open.
Things you will need to look out for are; Price action within the first hour, volume and strength.
But there is one important detail to note; the cryptocurrency market is a 24/7 market.
So the Daily Open occurs at 00:00 UTC time each day.
This tutorial elaborates on the above and also provides examples of three methods.
Whether you trade the Daily Open or not, there is still much to be gained from observing the opening session.
Key Points of the Lesson
UTILITY
Offers entry and invalidation.
Understanding the different open types gives conviction to trade the rest of the daily session.
Offers a strong edge over the competition.
IMPLEMENTATION
Minitor the first hour of the trading day ⇒ crucial for the following 23 hours.
Is it a strong move up or down? ⇒ trending? high volume? (Note volume, dollar amount move, Daily Open inside or outside pd-Value area?)
Trade retest of dOpen or continued strength
Strong move ⇒ expect continuation.
Meandering move ⇒ expect retest.
DAILY OPEN TYPES
1: Open Drive
Price ideally opens outside of pdVA
Continues with strength.
Expect a trending day.
2: Open Test Drive
Starts off slow (meandering).
Then tests dOpen.
Strong rejection with volume.
3: Open Rejection Reverse Drive
Weak initial move.
Rejection off key level.
Strong reversal through dOpen.
PRACTICAL EXAMPLE OPEN DRIVE
PRACTICAL EXAMPLE OPEN TEST DRIVE
PRACTICAL EXAMPLE OPEN REJECTION REVERSE DRIVE
TIPS & TRICKS
Initial Balance (first hour of the trading day) is key to help predict the day type ⇒ trending or range-bound.
Daily Open is 00:00 UTC ⇒ same for everyone in the world.
Cryptocurrency is a 24-hour market, key level tests can take longer than in legacy markets.
Use other technical analysis to establish price targets and take profit levels.
Market context and experience are key to help determine the developing Daily Open type.
TAKE HOME MESSAGE
Measure Daily Open strength.
Monitor for Volume injection.
Predict the day type ahead using the open Type and Initial balance.