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.
Time Stamps
2:46 – RVN/BTC COTW
13:46 – DAILY OPENS
- This theory comes from the stock market but also works very well with crypto
- Daniel monitors the first hour of daily open, it is very important
- Is there a strong move or is the price moving sideways?
- Check volume, the dollar amount that price moved on daily open, where it opened – below/within/above VA
- One can trade then retest/strength
- There are three important open strategies
18:07 – INITIAL BALANCE (IB)
- Initial balance is the first hour of the trading day
- Daily open is at 00:00 UTC time
- Because crypto is 24h market, tests can take longer
20:39 – OPEN DRIVE
- When price potentially (not required though) opens outside of VA and continues in a direction quickly with volume
23:03 – OPEN TEST DRIVE
- Starts off slow, tests daily open and then rejection occurs with volume
24:45 – OPEN REJECTION REVERSE
- The open makes a weak directional move, tests a key level that is strongly reversed
BONUS TIP
If there is an impulsive move but is not backed by so much volume there is a high likelihood that the high will be put in in the first 24 minutes. That move then fizzles out and the price goes back below daily open. So, there is a high likelihood that was the top, you can short the move and put SL above the high.
27:41 – OPEN DRIVE WITH EXAMPLES
- Invalidation is if the price goes back to daily open, though Daniel uses MS as SL
- If there is a strong IB and price retraces back to CC, it is a good setup
- But as always context and confluence!
34:11 – OPEN TEST DRIVE WITH EXAMPLES
- It is the most talked-about (though it does not happen too many times)
- There is choppiness at the beginning at the move
- The invalidation is back below/above daily open
- The confidence of differentiating between open drive and open test drive comes with the experience (you get the ‘feel’)
42:42 – THE OPEN REJECTION REVERSAL WITH EXAMPLES
- It gives a weak IB – price searches to test a key reference level (VAH/VAL/fib/horizontal level etc.)
- Price comes and tests the key level and rejects with an increase of volume. The conservative trigger is when the price goes through daily open. Daniel trades the key level though, he does not wait if he sees the evidence.
- Invalidation is back above the key level
49:29 – RECAP
53:27 – Q&A
- Daniel likes to trade daily open on the 3-minute chart if he is awake then and on 15-30 minute chart if he checks it the next morning
1:07:33 – SUMMARY
1:11:00 – QUICK BTC TA
EXAMPLE: BONUS VIDEO