TL;DR: Trade US30 in the first 2 hours of NYSE. Use RSI (period = 21) as a directional filter; when RSI closes above 50 (bias Long) or below 50 (bias Short) and an ignition candle forms, enter on a breakout at High + 3 points (Long) or Low − 3 points (Short). Place SL approximately ignition ±3 points. Target minimum R:R = 1:2; optionally scale out or trail.
Table of Contents
1. Introduction
A short-term intraday concept combining a directional filter (RSI 21 midline) with a momentum trigger (ignition candle). Designed for traders who prefer clear, rule-based entries focused on opening momentum in US30.
2. Strategy overview
- Instrument: US30 (Dow Jones CFD or futures)
- Primary timeframe: M1 (optionally M3)
- Session: First 2 hours of NYSE
- Indicators: RSI(21) and optional tick/volume indicator
- Core idea: RSI defines bias; a recently closed “ignition” candle is used as the entry reference and SL anchor.
3. Setup
- Chart: use M1 as primary; add M3 for context if available.
- RSI: Period = 21, show level 50.
- Optional: tick/volume indicator for confirmation.
- Session: mark NYSE open time on your broker server; trade only within the first 2 hours.
4. Trading rules
4.1 Filter / Bias
- Only consider Longs if RSI(21) closed above 50.
- Only consider Shorts if RSI(21) closed below 50.
4.2 Signal (ignition candle)
- The ignition candle is a recently closed candle with clear momentum characteristics (strong body, or a rejection wick). Use it as the reference candle.
4.3 Entry
- Long: place Buy Stop at High(ignition) + 3 points.
- Short: place Sell Stop at Low(ignition) − 3 points.
- Alternatively use a market order if price already exceeded the trigger.
4.4 Stop-loss
- Long SL: Low(ignition) − 3 points (or below recent swing low).
- Short SL: High(ignition) + 3 points.
4.5 Take-profit & Trade Management
- Base target: R:R ≥ 1:2.
- Options: scale-out (e.g., 50% at 1:1, trail rest), multi-TP levels, or trailing stop.
- If volume/ticks do not increase within ~15 seconds after ignition, consider skipping the trade.
4.6 Invalidation
- Ignore/cancel signals if: major news is imminent, spread abnormally wide, or higher-timeframe structure invalidates the bias.
5. Position sizing & Risk Management
- Risk per trade: 0.5%–1% of equity.
- Compute lot size from SL distance to maintain chosen risk percent.
- Pause trading and review after 2–3 consecutive losses.
- Limit concurrent positions (1–2 max for this approach).
6. Backtest & Validation
- Backtest 1–3 months of M1 data (6+ months preferred for confidence).
- Include realistic spread and slippage in simulations.
- Log each trade: entry, SL, TP, reason, outcome. Track expectancy and max drawdown.
7. When NOT to trade
- During high-impact news or scheduled events.
- In sideways, low-volume markets where ignition lacks confirmation.
- When spreads or execution latency spike.
8. Variations & Optimizations
- Test RSI(14) vs RSI(21) to evaluate noise vs responsiveness.
- Add a trend filter (e.g., EMA50 on M5) for alignment.
- Require a tick/volume spike for extra confirmation.
9. Pre-trade checklist
- RSI(21) applied and visible.
- NYSE opening time marked on broker server.
- Risk per trade set (0.5–1%).
- Spread acceptable and no high-impact news.
- Daily loss cap defined.
10. Conclusion
A simple, momentum-driven opening strategy for US30. Easy to test and implement; success requires strict discipline, careful SL placement, and consistent risk control.
11. FAQ
Q: Should I trade outside the NY opening?
A: The strategy is optimized for opening momentum; trading outside requires re-testing and rule adjustment.
Q: Are “points” equal across brokers?
A: Check the instrument contract specs — US30 point definitions and spreads vary by provider.
