Hours and Days

[BeM]

Hi everyone,
Is there anyone who has done any kind of analysis about the hours of the day? Are there research done about this?
I mean whether the markets behave in a certain way at 10am or 2pm or 4pm or something, are there any similarities of the market movements during the hours of one day and other days, perhaps also hours of certain days of the week have their own criteria.
I am doing some sort of personal research myself, let's see what the outcome will be after a while
Thank you for sharing your thoughts!

 

[Morris]

Look out for first hour reversals. Can be nice trades.

 

[BeM]

Actully being just in the beginning of my research or personal study, I have already noticed that there is some sort of direction change during the first hour of the open.

 

[Helenqu]

Hi BeM,

If you read Alan Farleys Master Swing Trader there is quite a bit about this issue.

Cheers

 

[FTSE Beater]

Is there anyone who has done any kind of analysis about the hours of the day?

In my view the first hour is frantic, and the market moves violently. The last half an hour is the same, with day traders closing there positions so they don't have to hold over night. The time in between is ideal for position traders as their is plenty of time to get a good entry and be in position ready for the end of day mayhem.

It's the same with the UK, with 2 O'clock being volitile due to the US open.

Personnally I love trading in dull times, as it gives more time to plan ahead.

HTH

 

[BeM]

Unfortunately I haven't read any book about this but I think it's quite essential for any trader to figure out how the market move depends also on the time of the day. When there is an upwards mood in the day it seems understandable to me that the market would not just go up in linear form, and the fluctuations must definitely be also because of the time of the day, of course if there isn't any change in the mood of the market because of some dramatic news etc. The same thing can be said when there is a negative movement, however from a different perspective.
What do YOU think?
Thanks for your replies

 

[Skimbleshanks]

FWIW, in my notes from ages ago I came across this, which was taken originally from a newsletter I believe:

I believe this relates to a 10:00 to 15:00 session as well.

1. If a rally after the open has returned to the opening price by 1:00, the day is expected to close weaker.

2. If the market is strong from 11:00 to 12:00 it will continue from 12:00 to 1:00.

3. If a reversal from 1:00 to 1:30 finds support at 1:30, it will close strong.

4. If the market has been bullish until 2:00 it will probably continue until the close and into the next day.

5. A rally which continues for 2 or 3 days (as in the sentence above) will most likely end on a 11:00 reversal.

6. In general, a late afternoon reaction down after a strong day shows a pending reversal.

Therefore, a summary of points 1-6 is:

A strong open with a reversal at 11:00 not reaching the opening price, then strength from 11:00 to 1:00, a short reversal until 1:30, and then a strong close; according to pt 5 above, another strong open the following day.

A strong open which reverses by 11:00, continuing lower until 1:00, reverses again until 1:30, and then closes weak.


I've not tried using this at all - I just use astronomy if I want to know when the next turn will take place! Hahahaha

 

[madasafish]

Hmm I did a lot of work:

basically trade 2:30 to 5, 7 to 9. Ignore 5 to 7 as US lunch.

 

[hjk]

No-one's mentioned the 1.30pm and 3.00pm US figures? Always a splurge of activity 5-10 mins before/after. Usually a good time to get in/out of trades that are against the general trend.

I find the UK/European figures have relatively little short-term effect even on the UK/European markets.

 

[razorgirl]

I look for different types of trade at different times of day. My favourite time is 8.30 - 9.30am as that's when big moves tend to get going, entering on a breakout or a chart reversal pattern and using a trailing stop. E.g look at RBOS this morning where I entered at 1453 after it got back through 1450, and see how the move starts to run out of steam in the late morning.

After 11am, if I stay at the screen, I have a look around for failures to get past big support or resistance levels (look at RBOS and 1520 this lunchtime) with a view to entry in the other direction. I don't trade any breakouts after mid morning as there is a high chance of them failing. But unless there are important results or US figures due out (which as hjk points out can provide some great opportunities, but can also slow prices and execution down so far as to be untradeable) I usually take the middle of the day off and come back around 2pm to see what's happening.

Later on, I've noticed that larger moves often get going after 3pm and again, it is worth letting positions run with a trailing stop until quite near the close.

For those of you who want to position trade with sells at resistance and buys at support, I would suggest that mid morning is a BAD time as you are likely to be standing in front of a train. Before 8.30 in the morning, or lunchtime, or maybe 3pm, is going to be much better. JMHO.

 

[TRICKIE RICKIE]

The day before after hours market gives good indication for the first hours market direction,Market fill orders tacken up ?So I am told?

 

[madasafish]

no

Have seen after hours up and sold heavily when market opens and vice versa. Depends on S&R, market direction, OB/OS, time of month etc etc.

If it was that easy!

Most rules such as this are just guidlines only and often wrong.

Far better to get a decent set of indicators and a time frame they work in.

 

[sifts2win]

Just spent last month looking just for this. Have tracked Dow futures with just bollinger bands on 15 min/5 min charts using 13,200 setting and get good reversal signals 20-30 mins after open and at 10 am their time. When bar closes outside band after extrme move excellent results from fading the move. Agree 11.30 when traders go to lunch best to get out. 1.30 pm (when they return) regularly results in another reversal especially if price outside band. Difficulty lies in having courage to counter trend and knowing where to place stop if move becomes a breakout.(40 pts above /below last spike looks good)
Still working on strategy, looks like you have to take every signal and be brave if stopped out. Sods law when I have jumped in with small spread bet have been killed ! Nothing new there then !!

As a note to above, hi everyone, new to site today. What a great site. Look forward to sharing ideas with you all. Have 5 years experience, breaking even with good money management I think. Can anyone help me with stop loss strategy though. I believe in tight stops but have been busted out of some great 'would have been monster' trades all too often. When I do open them out I just take a bigger loss. Its the one thing I can't get an angle on. Any suggestions ?

 

[madasafish]

stop losses?

I run a combined indicator stochastics and MACD
When it says buy, go long. then exit either when it says sell or when it has fallen 2 Points (S&P 500 so 2points = 0.25% or approx 20 points Dow)
i.e. a trailing 2 point stop.. Looking at today's action, average move = approx 5 -8 points..
(ignoring US lunch times)

 

[sifts2win]

Thanks madasafish,

Sounds like Dr. Elder's triple screen strategy which never worked for me! Can u be more specific about what constitutes buys and sells on the combined indicators ?
That's a very tight stop, doesn't that whipsaw you out of possible larger moves though? What time frame are you looking at. With current volatility aren't u in and out every 10 minutes ?

Mike.

 

[madasafish]

Rule 1. In a trending day onlt trade in trend direction
BIG triangles Blue/Gold say Buy/Sell
Only Buy/sell if next candle is in same direction as signal.. ie.. if sell down, if Buy up.. prevents false signals been taken.

Signal is based on:
(FASTD>SLOWD and MACD>MACD.1)+(FASTD<SLOWD and MACD<MACD.1)*-1

MACD exp 8,20,5
Stochastic exp 9,9,9
Buy when Indicator above turns from -ve to +ve
and vice versa.

3 min chharts
see attached...

 

[Naz]

Wow,widest post i've seen on t2w.

 

[BeM]

Madasafish,
How much do you pay to have this software, and where from, to trade eventually S&P 500 futures? Would you make it clear to me, what's E-Mini, embaressing question but better than not knowing forever?
Thanks!

 

[madasafish]

Details incl pricing are all here:
http://www.linnsoft.com/index.html

I use Mytrack Silver plan for data..

E Mini S&P is the Mini S&P 500 futures contract $50 per point..

(the maxi contract is - I think but don't hold me to it - $250 per point!)

You can spread bet the indices if you want.. I reckon City Index are best due to the streaming quotes and lack of bias.. but Fins give you a lower minimum.

Sierra and Mytrack is a very good and cheaper alternative.

I cannot recommend futures trading to the inexperienced. At $50 per point and a spread incl cost of around 0.5 points and a fast moving market, you can lose (or make) lotsamoney very quickly.

 

[sifts2win]

Madasafish,

just a quick reply then ? Thanks very much for your detailed answer and for sharing your trading method with us all. Do I assume correctly that you have programmed your software to give you blue or gold triangles when your indicators trigger accordingly ?
I am still sbetting after 5 years which is why I'm still able to trade. When the day finally dawns that I can consistently get an advantage in the market will I start trading the 'E' mini contract.etc.
Until then I'm playing with very small bets until I can build up a trading account and have a method in place.
As a general rule of thumb what sort of costs should I budget for to use say Sierra/Mytrack real time and still sb with Fin Spreads. To keep costs to a minimum and get max leverage I trade Dow Dec futures using Futuresource only. Looks like I will need a real time package to trade seriously !
Can any of you seriously professional girls and guys suggest a better way ?
Thanks again,