Intraday Open High Open Low Trading Strategy

Furthermore, many traders choose intraday trading over others since they believe it is the best approach to making money on a single trading day.

To book profits daily, traders employ various tools, such as charts and patterns, to assess stock performance and make based choices. They also understand basic ways of evaluating the performance of their scripts.

Although traders employ several tactics to earn from day trading, intraday traders frequently adopt the open high and low intraday strategies. This article will look at the fundamental principles of intraday trading, including the open-ended, low-strategy concept.

What is the open, high-low strategy?

The approach of the open high open low strategy differs slightly and can be challenging to grasp. In any case, we'll do our best to make things as simple as possible.

When the open and low values of the index or stocks are the same, a signal to buy the index or stocks is generated. Similarly, a sell warning or hint appears when the chosen store simultaneously has a similar value for both the open and high prices.

To make the open low technique work for intraday trading, an investor or trader should always remember to trade in massive amounts but for small aims. As unstable as the stock market is with all of its changes, you should be prepared as a trader to make a rapid entry and a swift exit if you want to record some good profits.

However, just like every other strategy, this method has certain drawbacks because it entails a high-risk-reward ratio, which requires much caution when trading.

Features of the open high open low strategy

Here are some characteristics of the available high and low plans:

Long-term Analysis: Even if you're trading intraday, avoiding trading opposite a stock's trend is best. As a result, you must examine the daily and weekly charts to guarantee that your purchasing and selling decisions align with a stock's movement.

High Risk-reward Ratio: When using the open, high-low strategy for intraday trading, you often confront a high risk-reward ratio. Set your stop loss around the strike price, generally at the low of the first 15-minute candlestick, especially if the stock's opening price is lower.

Using a Scanner to Determine the Trend of a Stock: Choose the open high low technique to accurately identify a stock's trend and make sound investment selections. Put certain stores on your watchlist and determine when to trade in them, helping you choose the ideal sector to put your money in.

Benefits of the open high open low strategy

The following are some key advantages of employing the open high open low approach in intraday trading in Indian stock markets:

• As the open high open low method is a trend-following strategy, it is intended to capitalize on the market's most substantial moves. This can enhance profit potential for traders who implement the approach correctly.
• The open, high, available and low strategy is adaptable to a wide range of market circumstances. This makes it an appealing choice for traders who want to trade in various market conditions.
• The open high open low method is low-risk since it employs stop-loss orders to reduce losses. This means traders' capital can be protected even if the market goes against them.
• The open high open low technique is simple to comprehend and implement. This makes it an appealing option for traders new to intraday trading.

Who should engage in an open, high, available, low strategy?

The open, high, low technique is a good choice for intraday traders. Intraday traders select one trading approach from the many available possibilities and then perfect that technique. It is the only way for successful traders to produce more profitable deals while reducing losses.

This is the finest scalping approach for intraday traders since they can trade on both sides, buy or sell, and try to earn a profit. Also, with practice, making a profit becomes second nature.

Example of the open high open low strategy

Assume you want to employ the OHL technique to trade STOCK A, which is traded on the National Stock Exchange (NSE). The stock begins the trading session at Rs. 500 a share and quickly jumps to Rs. 510. You interpret This as a bullish signal, and you decide to go long on the stock by purchasing 100 shares at Rs. 510.

To prevent potential losses, you place a stop loss order at Rs. 490, which means that if the stock falls below this price, the trader's position will be immediately canceled. Then, you carefully watch the stock's behavior throughout the day for indicators that the bullish trend is ending.

Later in the day, the stock increases to 520, prompting you to finish off your position by disposing of the 100 shares at this price. This leads to a Rs 1,000 profit (100 x 10).

How do you execute the open, high-low strategy?

The stock market, as we all know, opens at 9.30 a.m. You must be ready to make deals at least a few minutes before the call starts. To execute the open, high-low trading strategy, log in to your trading platform by 9.15 a.m.

Here's how to use the open high open low intraday trading method step by step:

• Access your trading account and ensure sufficient funds are available to execute your desired trade.
• Navigate through the app or desktop UI to build a watch list of scripts. Your script watch list should be available by 9.15 a.m. or 15 minutes before the market begins.
• When creating the watch list, note the previous day's highs, lows, and pivot levels, which you can quickly discover on the brokerage platform.
• Until 9.45 a.m., observe how your scripts' prices are shifting based on changes in open interest for derivatives securities or news regarding equities. You can also examine the analytical charts to see how things have changed.
• You have till 9.45 a.m. to enter; wait until the price breaks out of the previous day's high when the market starts. When it is damaged, you should see if today's starting price equals today's low. If affirmative, consider initiating a long position, with your stop loss set at the lowest price recorded on the current trading day.
• Use the intraday open high-low approach to go short around 9.45 a.m. In this instance, mentally note the low point from the preceding day before 9.15 a.m. When the market starts for the day, you should wait until the price breaks through the previous day's low.
• When it happens, check if the current trading day's beginning price equals the day's high. If it does, you should go short, with your stop loss set at the high cost of the current trading day.
• Once you've successfully used the open high-low trading method, you can exit the trade at the end of the trading day or your predetermined stop loss.

Factors to Consider When Engaging in Open High Open Low Intraday Strategy

There are a few facets that you must consider while using the open high open low method for substantial returns, including:

• The key to implementing this technique successfully is to trade in stocks of high volume.
• Many experts believe that the best risk-reward ratio for this approach is 1:2. Thus, traders should seek to reduce their risk exposure.
• It is critical to observe that the first candle's closing price should be less than the second candle's closing price.
• The attention should be on the range's breakout to enter any long or short position.

Open high open low intraday trading tips

A few intraday trading tips that will help you enhance your returns when engaging in the open high open low strategy are:

• Do your homework: Before diving into OHL trading, research the companies you're interested in and market movements. This will allow you to make better trading judgments.

• Set a stop-loss order: This will promptly sell your shares if the stock price drops below a specific level, allowing you to limit your losses.

• Set realistic goals: The strategy will not make you a billionaire overnight, so be patient and set reasonable goals for yourself.

• Don't disregard market trends: Watch for trends and news that may impact your trades. Ignoring them may result in unanticipated losses.

• Maintain a trading journal: Keep track of your trades, including their reasons and results. This will help you find the patterns and gradually improve your trading approach.

Conclusion

The open, high-low approach can be a significant tool in your trading armory, whether you're an experienced trader or a beginner. So, always keep in mind, as with any trading, it's critical to stay current on market events and changes and to be ready to adjust your approach as needed.