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dotnettutorials.net-Intraday Open High Open Low Trading Strategy

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24 views

dotnettutorials.net-Intraday Open High Open Low Trading Strategy

Uploaded by

jay

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Download as PDF, TXT or read online on Scribd

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Intraday Open High Open Low Trading Strategy

dotnettutorials.net/lesson/intraday-open-high-low-strategy

Back to: Trading with Smart Money

In this article, I will discuss the Intraday Open High Open Low Trading Strategy in
detail. Please read our previous article, in which we discussed the GAP Trading
Strategy. As part of this article, we will discuss the following Open High Open Low
Trading Strategypointers in detail.

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1. The logic behind the Open High, Open Low Trading Strategy
2. Where it occurs in the big picture
3. Rules for trading OPEN HIGH LOW STRATEGY
4. With live example

Intraday Open High Open Low Trading Strategy

The original name of the strategy is Open Drive. From a buy-sell perspective, we called it
open high and open low.
Open high= sell
Open low= buy
So, open rive and open high open low are the same.

The logic behind the strategy

These are directional moves with strong hand participation and conviction.

Where does it occur? Location

1. It occurs most of the time after a sideways price action (tight price channel), or
2. You can also spot it at the start of a trading session.
3. From a strong supply or demand zone

Suppose an open drive occurs after a sideways price action. In that case, it indicates that
either strong buyers or sellers were accumulating their positions in the sideways price
action, or afterward, they started aggressive buying or selling activity to move the price.

At the start of a trading session, an open drive is generally caused by participants who
have made their market decisions before the opening bell. The market opens and
moves aggressively in one direction. Fueled by strong smart money activity, the price
never returns to trade back through the opening range.

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The rule for selling open drive or open high strategy
Where is the action playing out? (location in the big picture). Reason to take the
trade. It best works if a breakout from any sideways price action is a gap from a
strong supply or demand zone

1/5
First, 5 min candle(opening candle) should be a big red candle
Open = High. For easy reference, a 2-3 points buffer will be considered equal, not
carrying much weight
The first candle opens to close around the lower of the candle (preferably)
Volume must be high
Minimum Risk: Reward(R: R)=1:2(next support area)
Breakout entry after opening range or first candle low(for open high set up)
The price must be below VWAP for the sell

Let’s do it as an example

Open high strategy for entry

1. Wait for the first candle to complete. It should be a big red candle
2. Volume should be high.
3. The 2nd inside candle should be a Doji or narrow candle
4. low of second candle equal to low of 1st candle
5. Declining or lower volume on 2nd candle
6. 2nd candle range stays within the bottom 2/3rd of 1st candle
7. The price must be below VWAP
8. Stop loss above your entry candle or day high as per your risk

Let’s do an example

Today, I took this trade

On a daily time frame, the price increases with volume decreasing and closing near
resistance. I clearly indicate that this move will not break the resistance.

2/5
Today, the price gap is up to resistance. Then, wait for 1st candle to complete

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What did the first candle tell me?
A big red candle
Open = High
The first candle opens and closes around the lower of the candle
Volume very high

All these indicate bearishness. So sold in next candle. As shown in the image below

3/5
You can find open low or open high in our scanner

https://docs.google.com/spreadsheets/d/1v02Aq9B6xTa7WZ8OP6NUO0d-
3dKMKFGrxXVv5kMjF6k/edit#gid=0

4/5
You can create your above scanner here: https://dotnettutorials.net/lesson/how-to-
make-own-day-trading-scanner/

The OHOL strategy is quite straightforward but should be employed with a thorough
understanding of market behavior and individual stock characteristics. It is also essential
to consider news and other events affecting stock prices. As with any trading strategy,
there is no guarantee of profit, and it is critical to practice sound risk management at all
times.

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In the next article, I will discuss the PIN Bar Trading Strategy in detail. Here, in this
article, I try to explain the Intraday Open High Open Low Trading Strategy in detail. I
hope you enjoy this Intraday Open High Open Low Trading Strategy article. Please join
my Telegram Channel, YouTube Channel, and Facebook Group to learn more and
clear your doubts.