Setup Example
Setup Recognition
Pre-Market Indicators
The Opening Rip setup begins forming before the market opens. Look for these pre-market signals:
- Futures trading significantly above previous day’s close (0.5%+ for NQ)
- Strong pre-market volume compared to average
- Positive overnight news or earnings catalysts
- Pre-market high continuing to push higher into the open
The 9:30 AM Explosion
At exactly 9:30 AM ET when the cash market opens, watch for these immediate confirmations:
- Price surges higher within the first 1-2 minutes
- Volume spikes to 2-3x average opening volume
- No hesitation or choppy action - clean directional move
- Breaks above pre-market high quickly (within 5-10 minutes)
Critical Timing Elements
The First 5-Minute Bar
The opening 5-minute bar tells you everything about the setup’s validity:
- Bullish Close: Must close near its high
- Range Expansion: Should be one of the largest 5-min bars
- No Lower Wick: Little to no selling pressure visible
- Volume Confirmation: Highest volume bar of pre-market and open
The 15-30 Minute Continuation Window
After the initial explosion, the next 15-30 minutes determine if this is a sustainable rip:
- Price should NOT break below the opening 5-minute bar low
- Each pullback should be shallow (less than 30% of the move)
- New highs should be made within 15-20 minutes
- Volume remains elevated compared to average
Entry Strategies
Strategy 1: The Immediate Entry
For aggressive traders who can recognize the setup instantly:
- Enter within first 2-3 minutes if all signals align
- Use the pre-market low as initial stop
- Scale in on first minor pullback
- Highest risk but captures the full move
Strategy 2: The First Pullback Entry
For conservative traders who want confirmation:
- Wait for first pullback after initial surge
- Enter when price bounces off opening 5-min bar high
- Tighter stop below the pullback low
- Lower risk but may miss some of the move
When to Exit
Clear signals the Opening Rip is ending:
- Break below opening 5-minute bar low
- Negative TICK readings becoming frequent
- Advancing-declining ratio deteriorating
- Volume drying up on pushes higher
Common Mistakes to Avoid
Chasing After the Move
- Don’t enter after 30+ minutes unless breaking to new highs
- The best risk/reward is in the first 15 minutes
- Late entries often get caught in the reversal
Ignoring Market Breadth
- Opening Rips without breadth support often fail
- Always confirm with advancing-declining issues
- Solo moves in NQ without market support are dangerous
Using Too Tight Stops
- Opening volatility requires wider stops
- Don’t use normal day trading stops
- Account for the increased opening range
Variations of the Setup
Gap and Go
When the market gaps up significantly (1%+) and continues higher
News-Driven Rip
Economic data or Fed announcements at 8:30 AM create opening momentum
Short Squeeze Rip
Heavy short interest gets squeezed at open creating explosive moves
Technical Breakout Rip
Major resistance levels broken in pre-market trigger continuation at open
Psychology Behind the Setup
The Opening Rip works because it represents maximum emotional intensity:
- Overnight traders rushing to adjust positions
- Shorts panicking to cover at any price
- FOMO buyers afraid of missing the move
- Institutional money deploying capital aggressively
This emotional surge creates the explosive price action, but it’s unsustainable beyond the first hour, which is why timing is critical.
Historical Precedents
Below are 3 historical examples of this setup occurring in NQ futures. Each example shows the setup formation and execution.
