What I have observed in emini trading is that there are certain times of the day when generally there is a move up or down that yields a 6 tick profit on a 1 tick or no slippage entry. All times are cst:
Usually first 5 to 7 minutes are buy/sell orders from previous day or other forces trying to take positions.There are two moves (or one continuous move) between 8:37 and 8:50 a.m.
There is one strong move at 9:00 a.m.It may or may not be news related.
There is one move at 10:30 a.m.
There is one strong move at 11:30 a.m.
There is one move at 1:00 p.m
There is one move at 2:40 p.m.
On tight range and FOMC days the moves may yield a profit of 4 to 5 ticks Except the moves at 9:a.m and 11:30 a.m where targets can be set higher than 6 ticks.This observation is for scalp trades but can also be helpful in swing trading.Thank you
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Here is a sheet I typed up from Ed Moore's Rhythm of the Markets method I studied several years ago. It is perhaps a bit complex to read without knowing the method but basically he is distinguishing between trend and non-trend days. Once you get a feel for it, it is very helpful. Only for indexes.
Last edited by cclsys; January 8th, 2010 at 11:03 AM.
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Sorry for late reply. Have been a bit distracted/busy of late.
A 'Contra' move is a move that is contrary-to / against the main trend of the day. Often you get a trend up or down in the am. Then there is a lunch-time pause. Then there is a move back up to the day high (if a bull day) or a little higher. Then around 1 EST or so a 'contra' move that corrects 35-60%. The shallow the contra, the more the probability that there will then be follow-through to new highs as trend continues. A deep contra, esp. one greater than 61.8% (or roughly etc.) indicates the trend has run out of steam and if the next probe up to day highs fails to get there, then a larger move down might be in the offing.
If there has been no contra after lunch but trend continues, then a late contra can happen around 2.30 ish.
And if the market has generally been up all day with only shallow corrections, then the 3.30 corrective move can be fast and deep as floor traders take out day-trader positions esp. of those traders/systems that hold into the close after entering shortly after the open etc.
These are tendencies, of course, and each day is unique. But there often are clear turning points that happen around 1.00 EST, 2.00 EST, 2.30, 3.30 etc, often very close to those times so they are worth watching in the context of the overall day.
These things are more accurate, I suspect, with indexes than anything else, but the general trend-contra-trend notion works in any market. Some markets have clear lunch periods (those open longer) whereas others don't (those with much shorter sessions like grains). And again, each day is different.
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Also agree that the first couple of hours have the most action,with a "rather common" change in trend after the first half hour (in the ES). After that, I join Brucebx in giving the money back to the market ...