The Opening Price Principle
The Best Kept Secret on Wall Street

Book Review by Edward D. Dobson, President, Traders Press, Inc.

Two veteran traders with over fifty years of combined trading experience reveal a startling new secret about the way markets behave in their new book. There is an amazingly reliable relationship between the opening price and the high and low price range for the entire day. This relationship, like many other principles of technical analysis, applies to all actively traded markets, which includes various futures markets, indices, and individual stocks. This book reveals this relationship, illustrates it with many detailed charts, and shows the reader in great detail how to trade profitably using it. The authors have developed their own method for trading this relationship and show how they use it in their own daily trading. This book will prove to be of great interest and value to day traders in either individual stocks or in futures markets. The principle and the trading method work equally well in all liquid markets.

In evaluating books which offer advice to traders, especially a system or method, one should, in this writer’s humble opinion, place more value on those authored by actual traders, who "put their money where their mouth is", in contrast to those authored by researchers or academicians, who have not actually put their theories to test in the very real world of day to day trading. The authors of "The Opening Price Principle" are eminently qualified to offer advice to traders, since they have actually traded the principle and method they teach in their book for years, with highly successful results. The first, Larry Pesavento, is a well known trading mentor who has trained hundreds of traders, is the author of six books on various aspects of trading, is a thirty year veteran of the Chicago Mercantile Exchange, and is currently a contract trader for a large hedge fund. Co-author Peggy Mackay, has longstanding experience on the institutional desk of a large Canadian broker, is an avid student of the markets and trading, and for the past six years has traded her own private account. The combined market knowledge and savvy that they offer their readers in this new book represents a valuable contribution to trading literature.

The principle which this book reveals and teaches is not heretofore unknown, but it is generally not common knowledge and, I would wager, is familiar only to the most seasoned and knowledgeable of traders. Even those who are familiar with this principle have undoubtedly not seen before the specific method of utilizing this knowledge to their trading advantage. Pesavento and Mackay represent themselves as pattern recognition traders, and state that the intraday patterns which are the cornerstone of their day trading methodology are present in all liquid markets. They illustrate and teach, through numerous charted examples, exactly how they trade, to include not only precise entry, but also exit strategies. Their book is intended to be a workbook to be referred to frequently by their trading students, not just a book that is read once then put on the shelf. It is clearly written and explained, and leaves no doubt in the mind of the reader on how to utilize the knowledge gained from this valuable book. While all the examples in the book use individual stocks, it is made clear that the principles may be utilized in any active market.

For day traders in stocks, indices, and futures markets, I would highly recommend this book. It is clearly written, well illustrated, and presents a unique and novel approach to day trading which has never been presented in any of the many books formerly published on the subject.

Review by Edward D. Dobson, President Traders Press, Inc.