Hey trader,
Every NQ session opened with ATR readings between 47 and 57 this week.
Hundred-handle bars were printing before 10 AM.
If you traded the open the same way you trade 11 AM, you got hurt. I know because I watched it happen on Monday, and I felt it myself.
This article breaks down the two-phase approach I developed in real time this week.
Phase one protects your capital during the chaos.
Phase two puts you in position to profit once conditions normalize.
Together they produced a 60-handle winner on Wednesday and a clean run to 25,000 on Friday.
The First Hour Is a Different Game
Tuesday, the market launched 200 handles within the first 10 minutes. The NQ blew through level after level so fast that there was no realistic way to catch an entry at the price you wanted.
"These opens. I tell you, man, they've just been brutal. To just try to catch something really requires a ton of patience."
By Wednesday, I had crystallized the approach and laid it out for the room.
"I think this is the way that we've gotta trade this thing, you guys, and we just focus on this process. Really, really, hone it in. And I'm just talking about the first hour. After that, we go back to our long 26s, our long 77s. Our short 26s, short 77s the way we normally do. It's just when the ATR is ballistic and the dome is doing all that. We just gotta have to respect it."
Phase one is the first hour, when ATR is elevated and the opening range is your primary tool. Phase two kicks in once ATR drops below 25 or 30, and you revert to normal Golden Setup level-to-level entries.
The methodology and the levels are exactly the same as always. The sequencing of how you deploy them is what changed.
What Phase One Looks Like
Monday showed what happens when you skip the adjustment. I was forcing my normal entries during a 50 ATR open while the NQ and ES were completely out of sync.
I took a quick 20-handle stop trying to short the 06 back through, then another loss chasing the move.
"We are so sloppy and outta sync here. Too many trades. I wanted to just catch one and hold it."
That was the wake-up call. By midweek, I had committed to the opening range framework for that first hour.
The plan was simple: let the opening range establish itself, wait for a break, then look for a retest entry.
On micros. With a 20-handle stop.
Wednesday delivered. I shorted the 36 on three micro contracts after reading massive divergence between the NQ and the S&P 500 advance-decline line.
The AD was going straight down while the NQ held. I waited for the stall, got my entry, and caught close to 60 handles.
"Solid trade, close to 60 handle trade on three contracts of micros."
That trade came after ATR started to settle. Phase one protected my capital.
The transition into phase two produced the winner.
Friday's Bias Flip
Friday brought the cleanest example of the week. PPI data hit the tape before the open and the NQ felt heavy.
I walked in short bias. The 12 level was cracking.
Everything pointed down.
Then the opening range broke to the upside.
"We were short bias. I was short bias. We had to flip it based on this. Don't fight it, right? Don't fight price."
Flipping bias is hard. You spend 30 minutes building a thesis, mapping your levels, telling the room where price is headed.
Then the market tells you something different. I flipped.
The opening range break led to a move toward 25,000. Previous day low, VWAP, weekly pivot, and the macro chart all lined up at that level.
We got long based on the previous day’s low, targeting the 24,912 key level on the macro chart.
That yielded +50 points x 3 contracts using the micro NQ netting a whopping 150 points.
The next trade, using that same 24,912 number as a gateway to 25,000, we got long around 24,916 for another +50 points x 3 contracts, again a nice 150 point gain.
"Our macro chart is just, I mean, it's just money. That combined with previous day low, opening range, VWAP, weekly pivot, all of those things led to this 25,000 up here."
You only see that confluence if you are paying attention to the opening range first, rather than forcing a pre-market bias onto a tape that has already shown you something different.
The Right Surfboard for the Wave
On Tuesday, I told the room something that became the operating principle for the week.
"We're just surfing big waves here, you guys. We gotta have the right surfboard for this stuff."
The right surfboard for the first hour is the opening range framework. Let it establish, watch for the break, trade the retest.
Keep stops at 20 handles. Trade micros so a bad read costs you $80 instead of $800.
Once ATR drops into normal territory, go back to the Golden Setup entries I have been trading since 2016.
"Get this first hour of junk out of the way."
The first hour in this tape is the time for patience, opening range awareness, and capital preservation. The good setups come after.
Friday proved it. The opening range break gave me the direction.
The confluence gave me the target. The bias flip gave me the trade.
"Paddling into these waves is a little dicey sometimes to say the least, but this is our market. We're at least managing risk because we're not risking a ton on any one of these trades. Risking less than a hundred bucks on these trades and, you know, a hundred to 80 to make 200. It makes sense."
It does make sense. The two-phase approach is an adaptation to a tape that demands different tools at different times of day.
What This Means for Next Week
The levels will be the same on Monday. The Golden Setup entries will be there.
If ATR is screaming at the open, trade the opening range. Wait for the break.
Wait for the retest. Stay on micros until conditions settle.
Once the tape calms down, go back to work. The levels are waiting.
See you in the room Monday.
Trade smart,
Tony Rago
Creator of the Golden Setup