9:30 Open Liquidity Strategy Explained

All right. Hello everyone, this is David from Trader Dale, and today I am going to show you a little play or type of strategy that you can start using right away. This is going to happen almost every day, and it is going to happen pretty much in the first 10 minutes of the market. It is very easy to understand. There are two ways to do this strategy. You can either use a data wick off a news event, like CPI, PPI, or non-farm payrolls, or what I am going to show you today is using the 9:30 open. The concept behind this is very simple. At 9:30, we are going to create a 1-minute candle. That candle is going to look something like this. It could be a little bearish, it could be bullish, it does not matter, but it is going to leave a high and a low. So, what you are going to do is take the 9:30 1-minute candle and mark out the high and the low.

Sometimes what will happen is price will open, take out one side, and then immediately take out the other side, without really any type of movement. But a lot of times what happens is price will break one end and then kind of leave the other one open. Whether we leave the high or the low open, this candle is going to be a great draw on liquidity early in the day. Let me show you some examples of how we play this. I am going to show you three live examples. Here is an example from June 17th. As you can see, we have the 9:30 candle, the 1-minute candle, marked out. We have the high and we have the low. What we are looking for is a break of one of these areas that takes out some type of liquidity, which we got here. We have liquidity here. We are delivering from a Fair Value Gap, which is also key, and then we are looking for an entry for price to move back and target those highs.

Here at Trader Dale, we like inverse Fair Value Gaps, which are a great entry model to target that 9:30 high. So again, you are waiting for one side to be broken and liquidity to be taken out. If you have an SMT with ES, even better. Then we are looking for an entry model to target the opposite end of that 1-minute candle. This entry is an inverse Fair Value Gap. You can also use a change in state of delivery, where price breaks the change in state of delivery and then you can use that as well. You will get a little bit higher of a price than with an inverse Fair Value Gap, but you are looking for one of these sides to be taken and then a change in order flow to target the other side. This happens almost every single day.

Let’s go to the second example. This is June 18th. I have the high and the low marked out. As you can see, this took a little bit longer, but we broke the bottom level here and left the 9:30 wick open. We took out intraday liquidity right here, we took out liquidity right here, and then we are going to look for an inverse Fair Value Gap to trade toward that 9:30 high. One entry can be this inverse right here. A second, more conservative entry, or an add-on entry, could be after we inverse this. If you wanted to play the change in state of delivery, you could have bought the retracement back to the change in state of delivery, all targeting that 9:30 high. So again, just like the other example, we broke the bottom first, and then we are looking for price to draw back into that 9:30 high.

Let’s give you a third example. This is from Monday, June 22nd. Again, you can look at these, put these on your charts, and do the same thing. Here, we have the same situation. We have the 9:30 1-minute high and low marked. Price breaks through the initial low first, taking out this liquidity, delivering from a Fair Value Gap, and also taking out this liquidity down here. The entry is going to be on an inverse Fair Value Gap right there. There is no change in state of delivery play here, so the inverse Fair Value Gap is the entry, and you are going to target that 9:30 wick high.

Again, it is very simple. At 9:30 a.m., you are going to mark out the 9:30 1-minute candle, the high and the low. Whichever side breaks first, you are going to look for an entry to target the other side of that 1-minute candle. Sometimes it will happen very quickly. In the last example, it took a little longer. Either way, you can use these levels as big draws on liquidity intraday because if you go back in time, very, very rarely do we ever leave a high and a low untapped before taking one out and going in the opposite direction.

Pull up your charts, backtest this, and go through every day. It is the 9:30 a.m. Eastern Time 1-minute candle. Mark the high, mark the low, and see for yourself how price reacts. Once price breaks one end and takes some liquidity, look for an entry model. It does not have to be our entry model. It could be your entry model. Look for an entry model to take that to the 9:30 high or low, whichever was not taken first. In these three examples, we obviously took the lows first, not the highs. But the same works in the opposite direction. Just to show you, we can inverse the chart. This is what it would look like on an inverse basis, taking out the high first and then coming back and drawing toward the low.

Very simple. This is a strategy that we use here basically for the first 10 to 15 minutes of the market. Sometimes it can happen a little later, but it is something very easy to understand. It is something that you can apply right away. It is something you can backtest very easily, and it is something that is very easy to understand. I hope this helps.

Hey everyone, it’s Dale here. I hope you enjoyed the video. If you would like to trade alongside me and our team of prop firm funded traders every day, then click the link below the video and hop aboard. We are looking forward to trading with you.