One of the things I’ve learned over the years is how important key levels are when it comes to trading.
I’m talking about opens, highs, lows, and closes — and while they’re all worth watching, I’ve found that opens are the most useful.
Let me explain why I prioritize opens and how they guide my trades every single day.
Why I Focus on Opens
You always hear about where the market “closes” — it’s all over the news. But for me, it’s the open price that tells the real story.
The “open” is the first traded price for a specific time frame — daily, weekly, etc. It’s a psychological marker that shows where buyers and sellers stand.
I think of it as the “start of the race” for that particular time period.
Here’s how I look at it: if the price is above the open, the market’s likely moving higher.
If it’s below the open, chances are we’re heading lower. It’s really that simple.
And this isn’t just for daily charts.
I look at opens across all timeframes — the day’s open, the week’s open, the month’s open and even the year’s open.
Those opens give me a quick, reliable way to gauge market sentiment.
How I Use Key Levels to Trade
Every day, I have my eye on the daily, weekly, monthly, and yearly opens. These levels act like guideposts, showing me whether the market is building strength or losing it.
Here’s how I use them:
- Daily Opens – The daily open tells me what’s happening right now. It’s my go-to for intraday sentiment (sentiment within that day I’m looking at). Are we building on yesterday’s gains, or are we pulling back?
- Weekly Opens – The weekly open helps me spot trends over a slightly longer timeframe. Is the market continuing last week’s momentum or reversing? This is great for getting a broader perspective.
- Monthly and Yearly Opens – These are my anchors. If a stock or index stays above the month op and the year open, it’s showing strength. If it dips below, I know it might be time to start watching for signs of trouble.
How I Use Key Levels to Gauge Sentiment
Let’s say I’ve been out for a few days — maybe on vacation or just taking a break.
When I come back, the first thing I do is check the key levels. Here’s my quick routine:
- I start with the S&P 500 (futures ticker /ES) or another major index. Is it above or below last week’s open? Last month’s open? That gives me a good sense of overall market sentiment.
- If I’m trading a specific sector, like energy, I’ll check an ETF like XLE against its key levels to see how it’s performing.
- Then, I look at volume and momentum around these levels. A strong move above a key open with solid volume? That’s a bullish sign. If we’re failing to hold above a key open, that’s a red flag.
Keeping It Simple
I know this might sound simple, but that’s what makes it work. But sometimes the basics are the most important things to remember, especially as you advance in your trading.
Key levels like opens give me a clear view of what’s happening in the market without overcomplicating things.
For me, trading is all about cutting through the noise. By focusing on these levels, I can quickly figure out whether I should be leaning bullish, bearish, or just staying neutral.
My Takeaway
Key levels have been one of the most valuable tools in my trading career. Whether it’s daily, weekly, monthly, or yearly opens, these guideposts help me stay focused and make better decisions.
Next time you’re looking at a chart, give it a try. Check where prices stand relative to these opens and let that guide your trades.
You might be surprised at how much clarity it brings.
— Geof Smith
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