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§00 SCANNER - Opening Bell Trading Dashboard Guide

  • Opening Bell: First-30-minute volatility — scanner, momentum-leaders chart, L2, time & sales. Optimized for the 9:30-10:00am ET open auction window.

1. Classical Chart Patterns

Opening_Bell_Trading_Dashboard_Guide

Double Top / Double Bottom (Reversal Patterns)

  • Description: A Double Top occurs when the price reaches a high point twice with a moderate decline between the two peaks. It signals a bearish reversal. Conversely, a Double Bottom consists of two distinct lows separated by a peak, signaling a bullish reversal.
  • Market Psychology:
    • Double Top: Buyers attempt to push the price to new highs but meet strong resistance at the previous peak, signaling exhausting demand.
    • Double Bottom: Sellers attempt to push the price lower but are met with aggressive buying at the previous low, signaling institutional accumulation.
  • Execution Strategy:
    • Entry: Enter short (Double Top) or long (Double Bottom) upon a confirmed breakout and close past the "neckline" (the intermediate trough or peak).
    • Stop Loss: Placed just above the second peak (Double Top) or below the second trough (Double Bottom).
    • Profit Target: Measure the vertical distance from the neckline to the peaks/troughs, and project that same distance from the breakout point.

Head and Shoulders (Standard & Inverse)

  • Description: A Head and Shoulders pattern features three peaks: a higher peak (head) between two lower peaks (shoulders). The Inverse Head and Shoulders features three troughs with the middle one being the deepest.
  • Market Psychology: Represents a structural shift from an established trend to a state of equilibrium, followed by a trend reversal as momentum completely flips.
  • Execution Strategy:
    • Entry: Enter on a decisive close below the neckline (Standard) or above the neckline (Inverse).
    • Stop Loss: Placed above the right shoulder (Standard) or below the right shoulder (Inverse).
    • Profit Target: Equal to the vertical distance from the head to the neckline, projected from the breakout level.

Triangles (Ascending, Descending, Symmetrical)

  • Description:
    • Ascending Triangle: A flat upper resistance line with a rising lower support line (typically bullish).
    • Descending Triangle: A flat lower support line with a falling upper resistance line (typically bearish).
    • Symmetrical Triangle: Two converging trendlines forming a cone, representing a period of compression and volatility contraction.
  • Market Psychology: Shows a battle between buyers and sellers where one side is aggressively stepping up their execution floor/ceiling (ascending/descending) or both sides are compressing into a coiled spring (symmetrical).
  • Execution Strategy:
    • Entry: Avoid trading inside the apex. Enter on a clean breakout candle closing outside the boundary trendlines.
    • Stop Loss: Placed inside the triangle structure, just beyond the opposite trendline or the most recent swing minor high/low.
    • Profit Target: Measure the widest part of the triangle (the base) and project that distance from the breakout point.

2. Candlestick Formations

Engulfing Patterns (Bullish & Bearish)

  • Description: A two-candle pattern where the body of the second candle completely overlaps or "engulfs" the body of the first candle.
  • Market Psychology: Demonstrates an immediate, aggressive shift in sentiment. For a Bullish Engulfing, sellers dominate early, but buyers overwhelm them completely by the session close.
  • Execution Strategy:
    • Entry: Enter at the open of the third candle following the completion of the engulfing bar.
    • Stop Loss: Below the low of the engulfing candle (Bullish) or above the high of the engulfing candle (Bearish).

Hammer & Inverted Hammer / Shooting Star

  • Description: Single candles characterized by small bodies and long wicks (at least twice the length of the body). A Hammer occurs at the bottom of a markdown trend; a Shooting Star occurs at the top of an uptrend.
  • Market Psychology: Represents rejection of high or low prices. A Shooting Star shows that buyers pushed prices aggressively higher, but sellers returned in massive force to slam the price back down to close near the open.
  • Execution Strategy:
    • Entry: Wait for confirmation on the subsequent candle (e.g., a bearish follow-through candle after a Shooting Star).
    • Stop Loss: Placed strictly beyond the tip of the long wick.

3. Technical Indicators & Oscillators

Moving Averages (SMA & EMA)

  • Description: Trend-following lines that smooth out price action data. Simple Moving Average (SMA) calculates the average price over a set period, while the Exponential Moving Average (EMA) places a heavier weight on recent prices.
  • Core Concepts:
    • Golden Cross: 50-day moving average crosses above the 200-day moving average (Long-term Bullish).
    • Death Cross: 50-day moving average crosses below the 200-day moving average (Long-term Bearish).
  • Execution Strategy: Use moving averages as dynamic support and resistance zones. Look to buy pullbacks to a rising 20-EMA or 50-SMA during strong trends.

Relative Strength Index (RSI)

  • Description: A momentum oscillator that measures the speed and change of price movements on a scale from 0 to 100.
  • Key Levels:
    • Overbought (>70): Signals that the asset may be overextended to the upside and due for a pullback or consolidation.
    • Oversold (<30): Signals that the asset may be overextended to the downside and due for a technical bounce.
  • Advanced Use (Divergence):
    • Bullish Divergence: Price makes a lower low, but RSI makes a higher low. Indicates weakening downward momentum.
    • Bearish Divergence: Price makes a higher high, but RSI makes a lower high. Indicates weakening upward momentum.

MACD (Moving Average Convergence Divergence)

  • Description: A trend-following momentum indicator showing the relationship between two moving averages of an asset’s price (usually the 12 EMA and 26 EMA), paired with a Signal Line (9 EMA) and a Histogram.
  • Execution Strategy:
    • Bullish Signal: MACD Line crosses above the Signal Line from below, and the histogram flips from negative to positive.
    • Bearish Signal: MACD Line crosses below the Signal Line from above, and the histogram flips from positive to negative.

4. Risk Management Principles

Metric Target Standard Purpose
Risk-to-Reward Ratio (R:R) Minimum 1:2 Ensures profitability even with a win rate under 50%.
Position Sizing 1% - 2% of account equity per trade Prevents catastrophic capital destruction during a losing streak.
Trailing Stop ATR (Average True Range) based Locks in profits while allowing the macro trend to breathe.

Documentation Best Practice

Always pair pattern identification with volume confirmation. A breakout on low volume is highly prone to becoming a "bull trap" or "bear trap". Ensure volume spikes as the price breaks past critical structural levels.