Sometimes the simplest ideas are the best.
And this one is REALLY simple.
For years I’ve stated that my default option with half-day holiday sessions is to stand aside. Let them go. Volume is low and opportunity is most often limited.
On those rare occasions when I do trade them, when there might be some fundamental or technical factor with good potential to drive price, then I’ll do so in a definite “trade with caution†mindset. Being ok with no trades at all. And letting the opening structure develop first, to see whether or not this is an environment worthy of my time.
But the default option is take the day off. Use it as an opportunity for further review or study.
The next day though… that’s something I’ve not discussed often.
The day AFTER the half-day holiday session.
A day I REALLY look forward to.
Why?
Firstly, emotion drives price. And one factor that intensifies emotion is time. It’s hard enough having to wait two days over a normal weekend to be able to trade again. But three days… just try to hold back those undisciplined, emotional masses.
And secondly, the old standard concept of “volatility contraction leads to expansion“. The start of the week is compressed into one tight little narrow range. And I can just about 100% guarantee you, the remainder of the week will not remain contained within that high and low. It’s expansion time!
I hinted at this in my social media post a few weeks ago (31st of May) following the Memorial Day holiday. Note the second paragraph in particular.
And again this last week, following the Juneteenth holiday.
Key points:
- Consider it like an Opening Range for the following four sessions.
- A place to structure trades, should price retest the area.
- And a simple means of establishing a bigger-picture bias.
Standard opening range theory, shown here as it normally applies to a typical trading session:
In the “holiday session†scenario though, we’re looking at the whole week of data rather than one session. And defining the opening range as the high to low from Monday’s half-day holiday session.
It’s currently Wednesday evening (as I’m writing this) so let’s catch up with the price action so far. The following charts display the 30 minute Higher Timeframe data, with the daily RTH sessions shaded green.
In particular for those who might have fought the tape, trying to short all the way up. Question why. Context suggested potential for expansion. Price behaviour from the open confirmed it. The best opportunity is LONG. But if you must SHORT, step aside and await the end of the momentum drive. The time for shorting was approaching midday and beyond (if at all).
Keep it simple.
The standard trading timeframe opening range provides a simple means of confirming your intra-session YTC Price Action Trader bias (see volume 2 on future-trend assessment).
And the build up and release of emotion from a narrow-range holiday-session provides the same, but on a larger time scale.
Watch future holiday sessions and see if this concept can add value to your trading plan.
Happy trading,
Lance Beggs
PS. The following page lists all YTC articles with the tag: Opening Range – https://yourtradingcoach.org/tag/opening-range/