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. Thanks!
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.
1. The open⦠9:30 â 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 periodâ¦unless you practice, practice, practice. The RED zone does not mean down or upâ¦it means be extra careful. 2. Ten oâclock reverse⦠9:50 â 10:10 EST is a YELLOW zone. Ten oâclock 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 downâ¦itâs a time for a breather, pull back, or reverse. 3. Nowâs the time⦠10:10 â 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 oâclock and continues down during this time period. This presents a low-risk trade to the up sideâ¦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. Itâs about time⦠10:25 â 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 â 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 reverse. 5. Time and time again⦠10:30 â 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 â 2:15 is a RED zone. The midday doldrums. As you approach twelve oâclock if the trend was moving down it may just move up and vice versa. Many experienced traders call this the 12 oâclock hopâ¦or flop. Itâs 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 downâ¦it means be extra careful. Especially during the doldrumsâ¦most losses occur here. 7. Time on my hands⦠1:25 â 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; donât ask me why, just a lack of interest I guess. Itâs 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 itâs in the middle of the RED zoneâ¦danger, danger, danger! 8. Times flying by⦠2:15 â 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 workâ¦more action because after 2:00 p.m. the bond traders start to drift in to the market, and after 3 oâclock 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 â 3:10 is a YELLOW zone. After the bond market closes, they move the marketâ¦look for a reversal or spikes. Itâs 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 donât buy the ticket you canât catch the train. Remember the YELLOW zone is time for the market to stall, pullback, or reverse. 10. Time, and time again ⦠3:10 â 3:25 is a GREEN zone. The market starts to calm down between two significant reversal time periodsâ¦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 â 3:30 is a YELLOW zone. Thereâs 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, itâs a time for the market to stall, pullback, or reverse. 12. Times running out⦠3:30 â 3:40 is a GREEN zone. Not much going on here most days; anticipate the last reversal of the day (3:45 â 4:00). Take the time to set up this strategy; look at support and resistanceâ¦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 â 3:45 is a YELLOW zone. Itâs time for that last reverseâ¦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 reverse. 14. Where did the time go⦠3:45 â 4:00 is a GREEN zone. This time period reminds me of the 12 oâclock 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. Donât try to stay in the market in the last few minutesâ¦we donât 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.
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.
1-11-2006 reversal review: S for setup 9:49 S 10:23 10:57 S 11:41 S 12:54 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
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.