Five day-trading benefits to market-opening moves are worth weighing for investors seeking quick profits.
The five day-trading benefits to strategic, market-opening moves are a staple of the DayTradeSpy Trading Room advisory service led by two seasoned traders. One highly effective strategy is their “out-of-the-morning gate trade,” said Hugh Grossman, the founder and senior partner of the DayTradeSpy Trading Room.
Those five day-trading benefits offer alternatives to the market volatility that can come from longer-term investing in equities. At a time with geopolitical risk is rising with Russia’s unrelenting invasion of Ukraine and the Middle East conflict becoming a powder keg of combat in the wake of the murderous Oct. 7 attack of Israeli villages by Hamas militants who invaded from neighboring Gaza, the short-term nature of option trading is gaining increased interest, Grossman told me.
Grossman bases his recommendations on the SPDR S&P 500 ETF Trust (SPY), a highly liquid and diversified exchange-traded fund (ETF) that follows the top 500 stocks in America. The fund is familiar to many investors due to its sheer volume, and is resistant to market manipulation, he added.
Hugh Grossman leads DayTradeSpy Signal, Trading Room and Ultimate Training Workshop.
Five Day-Trading Benefits to Market-Opening Moves: Profitable Track Record
The out-of-the-morning-gate (OMG) trade is sometimes overlooked but has a strong success rate, said Grossman, a seasoned options trader and trainer who founded DayTradeSpy Signal, the Ultimate Training Workshop, the and the Pick of the Day and the Trading Room advisory services. He described it as a “cool little methodology” that seems to stay in the background, making money unceremoniously for those who pay attention to its merits.
After years of analysis, Grossman determined that the market will usually deliver on a directional trade based on its breakout beyond a support or resistance level on a five-minute chart. Once the stock closes outside of either of those levels, there is a high probability that a 6% gain can be reached fairly quickly, he added.
“In our live Trading Room, one of our early tasks is to establish those short-term support and resistance lines,” Grossman said. “Then, as SPY trading opens, we watch price action, triggering a trade when the price closes outside that tight range. We immediately put it up for sale for a 6% profit target.”
Five Day-Trading Benefits to Market-Opening Moves: 6% Solution
“’Why settle for just 6%?’ is a question often asked,” Grossman said. “The answer is simply a way to measure success. We need a standard by which to determine if the trade is successful or not.”
The strategy arose from witnessing how the market responded to early trading action, Grossman continued. He recalled.
“When I followed other gurus in my early years of trading, many would claim success if the stock went up even a couple cents,” Grossman said. “In my reckoning, that would have been a dismal loss as I would never have sold it for a couple cent gain. It’s just not realistic.”
Five Day-Trading Benefits to Market-Opening Moves: Technical Analysis
“We use a 6% target, but many of our traders make much more than that,” Grossman said. “By using our technical analysis we provide in the morning Trading Room, you can follow the price action and walk away with greater gains. The 6% goal is a very basic level we expect to earn as a minimum, designed for even the most novice of traders.”
Some Trading Room participants “score insane profits,” Grossman said. “For example, the “OMG trade” [on April 15] triggered on the $515 puts at 9:35 a.m. Entry price was $3.77 but these babies climbed to a high of $11.70 before the day was through. Of course, if anyone hits that high, it’s just a fluke, but many of our traders pull in double-digit [percentage] gains just by following our analysis.”
Not all trades will be winners, however, and it’s important to note the risks, Goldman said. Markets can and do reverse in a heartbeat, but the “OMG strategy” has proven itself to be a statistically sound system, even if, at the moment, it may seem hesitant to fill its target.
Five Day-Trading Benefits to Market-Opening Moves: Avoids Heavy Lifting
“It’s another one of those ‘set it and forget it’ type trades, designed for people who may not want to do the heavy lifting,” Grossman commented.
The acronym, OMG, seizes upon a popular expression and recasts it to mean “out of the morning gate,” Grossman explained. A trader only needs to watch the early morning trading for a limited number of minutes to pursue profits, he added.
If a trade is not triggered by 10:15 a.m. ET, there generally will not be one that day for DayTradeSpy Trading Room participants, Grossman said. But it is rare to see such “rangebound trading,” he added.
“These days, having a system such as this is invaluable,” Grossman said. “Markets change on a moment’s notice and may defy all rational premarket interpretations. Our typical day could consist of Iran attacking Israel, luring American involvement, mixed in with Israel attacking Hamas, while Russia continues its onslaught assault on Ukraine.”
Five Day-Trading Benefits to Market-Opening Moves: Seasoned Sherpas
Both Grossman and his partner Ahren Stephens are seasoned sherpas in trading stocks and options. In the DayTradeSpy Trading Room, they serve as shepherds to their flock of day-traders.
The out-of-the-morning-gate strategy generally identifies key trends, allowing a wise trader to simply go with the flow, Grossman added.
“The out-of-the-morning gate is a trade setup that we executive everyday in the Trading Room, using predefined support and resistance levels,” Stephens said. “These levels provide high probability trade opportunities that we look for every morning.”
Ahren Stephens co-heads Pick of the Day and the Trading Room.
“When these levels [of 6%] are broken up or downside, we execute the trade,” Stephens said. “You can really have a nice set of winners with this breakout strategy.”
Middle East Conflict Raises Risk: Russia Keeps Attacking Civilian Targets
The Middle East conflict keeps raising riks, while Russia continues to wage war against the civilian population of Ukraine. In addition, the current market mix of economic news is pushing stocks down as Fed Reserve members delay plans to cut interest rates, Grossman said.
“One would think positive bank earnings would prop up markets, but then SPY hits a major Fibonacci resistance level, falls over the edge, motivating other investors to bail out like rats jumping off a sinking ship, all while a former president takes the stand on hush money paid to a stripper… all before lunch,” Grossman said. “You can’t make this up.”
Those willing to try the DayTradeSpy Trading Room have recourse to the negative news that can batter the market. Trading options in SPY is a proven way to dodge the market risk, Grossman said.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Special Sale! Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is great gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for reduced pricing on multiple-book purchases.
