Other than those who use Murray Math are there traders here who weigh time of day more heavily than price levels or patterns? For me it seems like a head and shoulders reversal set-up works more reliably at about 10:00 AM EST than say 1:45. Any thoughts or experiences on this that anyone can share? Thanks ~EC
Hi El, Good topic and I hope many traders that use time of day in their trade methodology speak up. Note: Head and Shoulder patterns are not part of my trade setups in the Eminis...so I cannot comment on this particular pattern in reference to Time of Day. However, I will say that there are no key economic report releases at 1:45pm est (that I know about). This may explain why 10am est seem to have more of an impact on your Head and Shoulder price pattern or any other price pattern because 10am est is a common time for release of key economic reports. I use time of day for my trade decisions. In fact, its critical. Time of Day has a decision on a few (not many) of my price patterns...time of day has an impact on how many contracts I put on a trade and time of day has an input if I decide to stay on the sidelines or not. I'll try and give some general examples. First of all, any successful Emini trader already know the importance of all those key economic report releases. For example: On July 25th, Thursday...there were 3 key reports being released at 10am est...the Existing Home Sales, Help-Wanted Index and New Home Sales. These reports and those like them...more often than not...will produce some sort'uv strong parabolic trend...up or down. See chart below for example of this particular situation. I don't (I have in the past) take any positions just prior to any report release in hopes to get an early jump on a trend...I prefer to leave that up to the newbie traders. Instead, I prefer to react after the release...then...if one of my favorite price patterns is there (after the release)...I don't hesitate and I take the trade. Note: I do not recommend new traders try anticipating nor reacting via taking trade positions so close to these critical time periods until after that intraday trend has completed. In other words, wait for the volatility to get back to normal. Further, watch out for those double whammy time of day when reports are released...the infamous 9:45am est and 10am est. These two critical time of day are so close...I've seen traders take some heavy and quick losses here during any other Time of Day. Thus, first hour trading (9:30am - 10:30am est) is only for the veterans because if your a newbie to Eminis...the seasoned traders will take your money more often than not. http://finance.lycos.com/home/research/econ_calendar.asp http://online.wsj.com/public/resources/documents/b-econoday.htm Secondly, I use Time of Day to determine my trade size. For example, if one of my bread-n-butter trade setups appear in the first hour of trading: I tend to go heavy on the contracts. Mid-day trading: I tend to trade on the low side of my contracts. Other times of the day: I trade my usual size of contracts...even if its a bread-n-butter trade setup. Note: The term bread-n-butter is something I just picked up here at EliteTrader. I simply mean its one of my high probability trade setups I have a lot of confidence in taking a position without hesitation. Thirdly, Time of Day will dictate how I use a particular trade setup. For example, I trade via the 1min, 3min, 15min intraday charts. My most important chart for my trade setups is the 1min interval... many traders don't like the 1min chart because of the increased price noise...such noise I don't see because I have particular trade setups...with well-defined entry/exit trade methodology. Morning sessions, I tend to use the 1min chart interval unless its a strong parabolic trend...in that case...I'll switch to the 3 min chart. If it's a strong parabolic trend in the afternoon...I'll switch to the 3min or 15min chart. Till this day...after many many years...I still cannot figure out why so many Emini Futures traders enjoy trading the mid-day choppiness with low volatility. I watch over and over as these traders give back their morning profits in this time period more than any other time period while churning their accounts. Unless there's a strong trend during the mid-day trading session (often called the Dead Zone) that allows me to look for reversal or exhaustion trade patterns...I don't trade it and do most of internet surfing or live chatting to other traders. El Cazador, once again...this is a nice topic that should help a lot of traders or at least get some to explore how other traders exploit the Time of Day. NihabaAshi
sure. price patterns that pay great in the morning will nickel and dime you to death during lunch on most days, speaking of the average NYSE day.
I can't comment on that...I don't trade NYSE stocks. However, a few Emini traders I know have specific price patterns for the morning session...specific price patterns for the mid-day session and specific price pattern for the afternoon session. Simply, 3 completely different trading methodologies throughtout the trading day. That is, they only use specific trading patterns for a particular duration of the day. If the pattern doesn't appear...no trades for that Time of Day duration. In about a month, I'm going to be traveling thru the Chicago area and visiting a trader that does such...I may comment later on another thread if such a topic comes up about what I thought about 3 different trading methodologies based on the Time of Day. I'll post what I thought about this particular type of trading after watching her trade from her home office. NihabaAshi
No doubt about it. Every day has 4 seasons. Somewhere someplace someone has probably done a study showing the probablities of intraday trends based on time of day. 1. Theres the cold winter night, when just a few traders make small bets. 2. Theres the rite of spring at the session open when all traders are so full of hope. 3. Then theres the dog days when many positions are on and being tended to 4. And finally the harvest on the close.
I am beginning to look at the NYSE day as at least three sessions. On rare days, when order flow is plenty and there is a clear objective to the activity, it's basically one session with a lunch recess.
It seems to vary considerably, month by month or so, the impact the time of day has on trading styles and opportunities. Sometimes, only the first hour and last half hour are good. Other periods, the first two hours and last 2 or 2 1/2 hours are good. Lately, whole days have been pretty consistent and good.