How I Set Up My US30 Opening Trade

How I Set Up My US30 Opening Trade

Introduction

Here's how I set up my US30 opening trade for the NY market at 6:30 am PST.

WARNING: Before I start the article, lets get one thing straight; this is not for the novice or faint of heart. It has taken me over three years to develop consistency to trade this opening. I do NOT recommend trading this technique with real money. You can setup a Free account on FTMO.com to learn and master this strategy.

This material will be updated often as I continue to fine tune the system, so feel free to bookmark this page and refer back as questions arise.

 

 

US30 opening

The US30 opening is a very difficult time to trade. It's volatile and risky, with no easy way to time it or predict what might happen when it opens.

I do NOT recommend trading US30 with real money.

Just as with any stock market activity, you should always be prepared for the worst when trading US30 at the open. Just because you have a strategy doesn't mean the market will go your way! There are other factors such as trading psychology, FOMO (fear of missing out), greed, and fear that have a much bigger influence on your trade than the trading strategy.

 

EMA crossover indicator

An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average simple moving average (SMA), which applies an equal weight to all observations in the period.

The EMA crossover indicator is a very popular indicator.  The EMA crossover indicator works by identifying trend breaks based on the difference between two exponential moving averages (EMAs). 

This Free Moving Average cross over is available on Trading View.

  • Moving Average Cross Alert, Multi-Timeframe (MTF) (by ChartArt)

Moving Average Cross Alert, Multi-Timeframe (MTF) (by ChartArt)

I use two EMAs - 8 EMA and 93 EMA for my crossover on the 1 min timeframe.

Crossovers are used to estimate the performance of a financial instrument and to predict coming changes in trend, such as reversals or breakouts.

 

Heikin Ashi Candles

Heikin Ashi is a Japanese candlestick charting technique that is based on a moving average of the price. It's also known as an indicator, a trend following indicator and momentum oscillator.  Heikin-Ashi, also sometimes spelled Heiken-Ashi, means "average bar" in Japanese.

The Heikin Ashi method uses two different periods: one for smoothing and one for identifying trends.  It's useful for making candlestick charts more readable and trends easier to analyze. For example, traders can use Heikin-Ashi charts to know when to stay in trades while a trend persists but get out when the trend pauses or reverses.

The Heikin Ashi candles are FREE on Trading VIew and can be selected from a drop down menu.Heikin Ashi on Trading View drop down menu

I use this indicator as one of my criteria for entry.

 

 

Support Resistance indicator

The Support Resistance indicator is a tool to help you find support and resistance.

It’s based on the notion that price tends to find support and resistance at round number levels, with levels such as 1, 2, 3, etc. being important psychological points for traders.

The tool works by plotting these levels on your chart in the form of horizontal lines – as you might have noticed in my previous image!

I use this indicator as one of my guide to see where price action can bounce to help me enter or exit a trade setup.

The indicator is free on Trading View

  • Support/Resistance V2 Indicator
    • By:  BarsStallone

Support/Resistance V2 Indicator by BarsStallone

 

 

Entry criteria

In this article I’ll be sharing my entry criteria for the US30 opening trade. There are many ways to get into this trade, but I personally use these criteria to check for confluences before ENTRY:

  • I would only ENTER a BUY at SUPPORT or a SELL at RESISTANCE
  • EMAs crossover to indicate TREND is in the direction of my trade

  • Price action is not in the LIQUIDITY zone
  • Heikin Ashi candles confirm EMAs and other confluences. 

ENTRY SETUP

  • Time Frame:  1 min

  • SL: 50 and TP:150 giving a RRR of 1:3
  • Enter at the beginning of the SECOND candle of the Heikin Ashi

 

Exit criteria

When planning your exit, you’ll want to keep in mind the principle of risk management. I always look for at least two or three reasons to exit a trade before taking the position. In other words, when setting up my US30 Opening Trade, I need two or three things in place before setting up my order:

  • Price action–If price breaks below support or makes a higher low on its way down, then I would consider selling this trade.

  • Support/resistance–If price approaches key levels like moving averages or other resistance areas and fails to go through them with conviction (i.e., it bounces off instead), then that could be an indication of potential weakness in the market and cause me to exit my US30 Opening Trade as well.

  • Chart patterns–If several chart patterns are pointing downward on both intraday and daily charts (e.g., bearish engulfing pattern), then this may be an indication that bears have control over momentum right now and could continue their move lower (and thus cause me to exit).

In my setup, I EXIT when either:

  • Heikin Ashi changes color, e.g. from green to red, and/or
  • The Price Actions approach a SUPPORT or RESISTANCE.

 

The take profit and stop loss are the most important.

As you can see, we have a resistance line and support line. The stop loss should be below the support line and take profit above it.

The take profit should be at least 2 times the stop loss. So if your stop loss is 20 pips, then your take profit must be at least 40 pips.

You can also set your take profit to 3 times or more than your stop loss as well so that you will get more profits when the market goes up after hitting our target price level.

 

Today SETUP Trade.

On the chart for today opening on 8/16/2022 at 6:30 AM PST, I have the following confluences:

1.  EMAs crossover and indicates and upward trend breakout

2.  The price actions did not break support level

3.  Heikin Ashi change from red to green indicating a trend changes

US30 Open

I setup my trade as follow:

  1. SL: about 20 just below the support line
  2. TP: about 100 giving me a RRR of 5
  3. I took the BUY at the beginning of the SECOND Heikin Ashi candle
  4. I EXIT my trade for bout 114 pts when the price actions bounce against the RESISTANCE and/or Heikin Ashi changes color to red. 

 

Closing

I hope this article has been helpful for you. I know it can be intimidating at first but with practice, you will get the hang of it.

Remember do NOT start trading with real money - you will LOSE!  It took me over three years to get consistency and overcome some of my trading psychology.

Practice on a FREE account.

 ***  NOTE- this is mainly for reference on how I setup my trade on a FREE account and I do NOT recommend executing this strategy with real money. 

 

 

References:

https://www.investopedia.com/terms/e/ema.asp

https://www.investopedia.com/terms/c/crossover.asp

https://www.investopedia.com/trading/heikin-ashi-better-candlestick/

 

 

 

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2 comments

Excellent post.

PABLO GARCIA

Great analysis of US30

Hugo Lugo

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