Time of Day Bias for ES

Discussion in 'Index Futures' started by martys, Jan 11, 2006.

  1. I scalp ES reversal intraday. I found the opening and the first part of the morning (9:30-10:30 am) to be particularly productive due to the volatility. Kevin Haggerty said 90% of the time there is a reversal and 60% of the time the market reverse back the other way. I don't really look for them or try to fade the opening but when price gets to support/resistance and things confirm, I pull the trigger.

    I want to start looking for another time zone that is just as productive for reversals. Or if there are other time when market tends to trend that I should avoid. Any suggestion would be appreciated. I know there are articles out there on this but I would rather take it from actual trading experience.

    Here are the time-of-day bias (Eastern U.S. time) off the top of my head:

    9:30-10:30 am Good for reversal from my experience. Notably the 10 am reversal time zone.

    It's been the best time for me. Many times I close my shop after this such as today.

    11:30am - 12:00 noon Martini buying noted by Marty Schwartz.

    I found this to be true but I would not bet my money on it. Sometimes my trade looks dead before reaching the profit target then all of a sudden it got a second wind.

    12:00 noon - 2:00 pm Lunch Doldrum.

    Many people said this is the worst time to trade. But when I used to trade pullback, I tested out this period to be a productive time. The pullback system would miss out a chunk of profit if I skip the lunch time.

    2:00 - 2:30 pm Coming back from lunch?

    I remember this period has a lot of jerking around actions probably caused by the programs

    2:30 - 3:00 pm Bond close at 3:00pm

    I have not really looked at the data but maybe 2:00 - 3:00 pm could be another good period for entering reversal trade? I am not sure.

    3:00 - 3:30 pm Bond closed and usually if it is trending, it tends to continue pretty persistently especially when people got caught. I would consider holding a trade if it is going my way. When I tested my old pullback setup, it does not show profitability during this last hour of trading (3-4pm).

    3:30 - 4:00 pm All the institutions have to balance out their arbitrage positions during the last hour so it can be pretty random.

    Please correct me if I am wrong and give me your feel for ANY of the intraday time zone whether you are trading trend breakout, pullback or reversal. Any little piece of input would be appreciated.

  2. I trade 10:30 reversals, which usually occur between 10:20-10:40 but the majority of the time 10:30 will be the extreme tick to fade.
    I try not to trade between 12-1 but will often fade the lunch move if it such as if it was a down morning and then rose going into 12, and moves higher during lunch on low volume.
  3. Buy if ES makes strong move up during 9:45-9:50 period – 5min chart.

    Hold until about 11:00
  4. mhashe


    whats the logic behind the 10:30 reversal? It's very consistent
  5. 1. The open… 9:30 – 9:50 is a RED zone. The most dangerous time
    period for most, except the experienced day-trader. The first 20 or 30 minutes
    can be very profitable, and is the most dangerous time for the novice
    speculator. Volatility creates the largest profits and also increases your risk
    substantially. It takes about 20 minutes for the market to settle down. Please
    note there is no time zone that is risk free. Pay close attention to any news or
    Fed reports before and after the open. You would do well not to trade during
    this time period…unless you practice, practice, practice. The RED zone does not
    mean down or up…it means be extra careful.

    2. Ten o’clock reverse… 9:50 – 10:10
    EST is a YELLOW zone. Ten o’clock is one of those times you must be on your toes.
    The S&P often reverses or pulls back during this time. Look for gaps to get filled
    during this reversal time period. This is one of the more profitable times of the day.
    If the market remains stable during this period it usually remains stable until the
    next YELLOW zone. This is one of my favorite time periods. Learn its personality well! Look for a double top or bottom to start the pullback or reverse. The YELLOW zone does not mean up or down…it’s a time for a breather, pull back, or reverse.

    3. Now’s the time… 10:10 – 10:25 is a GREEN zone. This is the time to really focus
    on what the market is trying to tell you. This can be one of the safest times to
    trade; coming off of a pullback or a reverse or maybe just continuing in the
    same direction. Keep your eye on the Dow and Nasdaq here. Look for the market to
    move in the opposite direction of the open. The GREEN zone is a little more
    predictable and if prices move higher at the open it often reverses during ten
    o’clock and continues down during this time period. This presents a low-risk
    trade to the up side…go with the flow, and wait for the turn. The GREEN zone
    does not mean up or down; just one of the safest time frames to trade.

    4. It’s about time… 10:25 – 10:30 is a YELLOW zone. It may pause here or flat out
    reverse again. We will be ready, and we can anticipate this if we are in a trade
    and use a tight trailing stop. Once again we focus on what the market wants to
    do here. If you are just starting out, THIS IS THE TIME PERIOD you should study.
    The market has gone through most of the volatility of the day, and now it should
    form a steady trend till 11:15 – 11:30, and just may continue without any fan
    fair till 12:00. The YELLOW zone is time for the market to stall, pullback, or

    5. Time and time again… 10:30 – 11:15 is a GREEN zone. As mentioned
    above this could now trend till 12:00. This period is a safer time to make
    simple strategies work. If it did reverse at 10:30 it may continue in the same
    direction as time period 3. Please note that after 11:15 it is considered to
    have entered the doldrums, so take caution if you are in a trade during the last
    15-minutes which is is a RED zone. Remember the GREEN zone does not mean up or down; just one of the safest time frames to trade.

    6. Time out… 11:15 – 2:15 is a RED zone. The midday doldrums. As you approach
    twelve o’clock if the trend was moving down it may just move up and vice versa.
    Many experienced traders call this the 12 o’clock hop…or flop. It’s lunch hour for
    most traders on the floor, volume falls off, and it may form a channel or just move
    sideways during this time period. Inconsistent follow through; the locals scalp the market and eat you for lunch. You would do well not to trade during the doldrums. Only the most experienced should venture a trade here. Pay attention to the next time period because it lies in the RED zone. Remember the RED zone does not mean up or down…it means be extra careful. Especially during the doldrums…most losses occur here.

    7. Time on my hands… 1:25 – 1:35 is a YELLOW zone. This is just one of
    those times that, over and over again, tries to move to the lowest price in the
    afternoon; don’t ask me why, just a lack of interest I guess. It’s not a usually
    long time period as you can see, and most experienced traders refrain from
    trading during this time period. Look out for breakouts to the downside. You can
    be proficient with lots of practice, and due diligence. The YELLOW zone is time
    for the market to stall, pullback, or reverse. Also remember it’s in the middle of the RED zone…danger, danger, danger!

    8. Times flying by… 2:15 – 3:00 is a GREEN zone. Now that we have the doldrums
    out of the way we can get back to business. Trends are established; technical analysis can now be put back to work…more action because after 2:00 p.m. the bond traders start to drift in to the market, and after 3 o’clock the Chicago Bond market closes; look out here they come, looking for action. Look for frequent breakouts in both directions, and keep a keen eye on the next time period. Remember the GREEN zone does not mean up or down; just one of the safest time frames to trade.

    9. Time to catch the train… 3:00 – 3:10 is a YELLOW zone. After the bond market closes, they move the market…look for a reversal or spikes. It’s not uncommon to have news or reports around this time. If it does reverse here, look for the turn,
    and try to catch the train going north or south; it could be significant, but
    use caution, be on your toes here. If you don’t buy the ticket you can’t catch
    the train. Remember the YELLOW zone is time for the market to stall, pullback,
    or reverse.

    10. Time, and time again … 3:10 – 3:25 is a GREEN zone. The market starts to calm down between two significant reversal time periods…give it your best shot. If the trend is up, trade with the trend and vice versa. Use a safe strategy not a power trade. Remember the GREEN zone does not mean up or down; just one of the safest time frames to trade.

    11. Take your time… 3:25 – 3:30 is a YELLOW zone. There’s a good chance it might reverse here, just like the number 9 time period. Best to let it stall, pullback, or reverse and look for the next opportunity. Well, maybe a small breakout strategy might work for a point or so. Like any yellow time zone, it’s a time for the market to stall, pullback, or reverse.

    12. Times running out… 3:30 – 3:40 is a GREEN zone. Not much going on
    here most days; anticipate the last reversal of the day (3:45 – 4:00). Take the
    time to set up this strategy; look at support and resistance…just what are the
    possibilities here. The day is almost over, and if you are running out of time
    to make a trade, try not to panic, take what the market gives you. Remember the
    GREEN zone does not mean up or down, just more consistent technical analysis.

    13. Time to settle down… 3:40 – 3:45 is a YELLOW zone. It’s time for that last
    reverse…Brokers, speculators, market makers, and specialists are settling trades
    for the day. It moves the market in funny ways; you just go with the flow. If
    you see what the market is trying to do, look for the strategy to take advantage
    of it. Remember the YELLOW zone is time for the market to stall, pullback, or

    14. Where did the time go… 3:45 – 4:00 is a GREEN zone. This time period reminds me of the 12 o’clock hop or flop. If the market was moving down in the afternoon session, you can look for a hop; mainly caused by speculators covering their short positions, and vice versa if the market was moving to the up side. Don’t try to stay in the market in the last few minutes…we don’t want
    to get caught in having our trade move to an overnight position; you may get a
    margin call. Remember the GREEN zone does not mean up or down.
  6. Your view and those posted are not too swift up to this point.
  7. Then Please feel free to Contribute!!

    Good trading!!

  8. I have a feeling we will soon get a 1 page long reply with a bunch of allan greenspan type drunk rambling that could be best summed up in a few sentences.
  9. 1-11-2006 reversal review: S for setup

    9:49 S
    10:57 S
    11:41 S
    1:16 S Trend

    Tally: #days = 1

    Time #Reversals #Setups
    10:00 1 1
    10:30 1 0
    11:00 1 1
    11:45 1 1
    1:00 1 0
    1:15 1 1

  10. I was taught that it represents panic buying or selling from amatuers and retail during the first hour the market is open. I do know that it is the most consistent reversal time.
    #10     Jan 12, 2006