Morning Range v2
Morning Range Playbook
Your daily game plan. Learn the levels, wait for the signal, manage the risk.
PM Levels = Key Levels
No-Trade 09:30-09:45
Active 09:45-13:00
Max 2 Losses / Day
Cheat Sheet
Timing
- 04:00 - 09:30 — Premarket (levels form)
- 09:30 - 09:45 — NO TRADE ZONE (wait for Opening Range to close)
- 09:45 - 13:00 — Execution Window (take trades)
- After 13:00 — Cut size 50% or stop trading
Day Types
- Trend: Breaks PM level + holds = GO WITH IT
- Range: Rejects PM level + returns inside = FADE IT
- Chop: Stuck in middle, no level interaction = NO TRADE
Signals (What You'll See on Chart)
- GREEN BREAK RETEST — Trend continuation (Long)
- ORANGE BREAK RETEST — Trend continuation (Short)
- CYAN SUP BUY — Bounce off support (Long)
- FUCHSIA RES SELL — Rejection at resistance (Short)
Risk (Non-Negotiable)
- Max 2 losing trades per day. Then stop.
- Max 2 attempts per side (2 longs, 2 shorts).
- Hard stop required BEFORE entry. No mental stops.
- Never move your stop further away.
- Never average down into a loser.
This is a ruleset, not a guarantee. Every setup can lose. Use proper sizing, respect your max daily loss, and paper trade first if you're new.
Your Levels (What's on the Chart)
- Green dotted line = PM HIGH — Premarket high (04:00-09:30 ET). This is your main resistance.
- Red dotted line = PM LOW — Premarket low. This is your main support.
- Cyan solid line = OR HIGH (15m) — Opening range high (first 15 min of cash session).
- Fuchsia solid line = OR LOW (15m) — Opening range low.
- White dotted line = WEEKLY HIGH / LOW — This week's high and low.
- Gray dashed line = PREV WEEK HIGH / LOW — Last week's high and low.
- Yellow line = DAILY PIVOT — Yesterday's (H+L+C)/3. Above = bullish lean, below = bearish.
- Teal shaded box = The premarket range between PM HIGH and PM LOW.
How to Read the Day
After 9:45, watch how price interacts with PM HIGH and PM LOW. That tells you what kind of day it is.
Trend Day (Go With It)
- Price breaks through PM HIGH or PM LOW
- Volume is strong on the break
- Price stays outside the range (doesn't come back in)
- Wait for the retest of the broken level
- Enter when it holds + confirms with candle color
Range Day (Fade the Edges)
- Price hits PM HIGH or PM LOW and gets rejected
- It rotates back inside the range
- Sell the resistance, buy the support
- Target the midpoint first, then the opposite edge
- Don't hold for a breakout on a range day
Setup A: Break + Retest (Trend Days)
Price breaks a level, pulls back, retests it, and holds. That's your entry.
Long (Green BREAK RETEST Label)
- Price breaks above PM HIGH
- It pulls back and retests that green dotted line
- Closes a green candle above it (level held as support)
- Stop below the swing low of the retest candle
- Sell half at 1R, trail the rest behind higher lows
Short (Orange BREAK RETEST Label)
- Price breaks below PM LOW
- It pulls back and retests that red dotted line
- Closes a red candle below it (level held as resistance)
- Stop above the swing high of the retest candle
- Sell half at 1R, trail the rest behind lower highs
Setup B: Bounce + Rejection (Range Days)
Price hits a level and gets rejected. You trade the reaction, not the break.
RES SELL (Fuchsia Arrow Down)
- Price touches PM HIGH, Weekly HIGH, or Prev Week HIGH
- Closes a red candle below the level (rejection)
- Short on the close of the rejection candle
- First target: range midpoint. Second target: PM LOW
SUP BUY (Cyan Arrow Up)
- Price touches PM LOW, Weekly LOW, or Prev Week LOW
- Closes a green candle above the level (bounce)
- Long on the close of the bounce candle
- First target: range midpoint. Second target: PM HIGH
Position Sizing
Risk 0.5% to 1.0% of your account per trade. Calculate before you enter.
Formula: Position Size = (Account Size x Risk %) / (Entry Price - Stop Price)
Example: $10,000 account, 1% risk ($100), stop is $1.25 away = 80 shares.
Example: $10,000 account, 1% risk ($100), stop is $1.25 away = 80 shares.
- Stocks: Divide your dollar risk by the stop distance to get share count.
- Options: Your max risk = the premium you pay. Prioritize liquid strikes with tight spreads.
- Futures (MES/ES): Tick value x stop distance in ticks = risk per contract. Size accordingly.
Most traders don't fail because of bad entries. They fail because they size too big and don't follow their stop. Risk control IS the edge.
When NOT to Trade
- During 09:30-09:45 (Opening Range is still forming).
- Price is stuck in the middle of the range — not touching any level.
- Volume is low and candles are small and choppy.
- A major news event (Fed, CPI, earnings) is about to drop and levels aren't holding.
- The confirmation candle is too big — makes your stop too wide and kills your risk/reward.
- You've already lost twice today. Done. Walk away.
Before You Start
- If you're new, paper trade this strategy for at least 2 weeks before using real money.
- If you can't define your entry, stop, and target before clicking buy — skip the trade.
- No setup works 100% of the time. You will have losing trades. That's normal.
- The goal is consistency, not home runs.
Premarket Checklist
- PM HIGH / PM LOW identified
- Weekly HIGH / LOW and Prev Week levels noted
- Daily Pivot level noted
- Opening Range locks at 09:45 — no trades before then
- Day type plan: Trend / Range / Skip?
- Risk per trade calculated (dollar amount)
- Stop distance defined
- Position size calculated
- Any macro events today? (Fed, CPI, earnings)
- Max daily loss rule set — 2 losses and done