Good times of the day to day trade

J

jgiasi

All,

I trade equities on an intraday basis. I watch six and only six stocks - AAPl, RIMM, SNDK, KLAC, AMGN, ERTS. I try to capture fairly quick moves (.12 to .30 with a goal of .20). I have noticed that action heats up around certain times of the day. This has several advantages not the least of which is I need to break away from the computer. My thought is that such times are as follows:

9:40 - 9:50
9:55 - 10:15
10:20 - 10:45
10:55 - 11:40
12:55 - 1:20
1:55 - 2:15
2:20 - 2:45
2:55 - 3:20
3:25 - 3:45

My thought is that you can pick and choose the intervals that you want to trade.

Has anyone else given any though to times of day in which to day trade equities?

Please share any ideas and/or observations.

Thanks, Jenny
 
Quote from jgiasi:

All,

I trade equities on an intraday basis. I watch six and only six stocks - AAPl, RIMM, SNDK, KLAC, AMGN, ERTS. I try to capture fairly quick moves (.12 to .30 with a goal of .20). I have noticed that action heats up around certain times of the day. This has several advantages not the least of which is I need to break away from the computer. My thought is that such times are as follows:

9:40 - 9:50
9:55 - 10:15
10:20 - 10:45
10:55 - 11:40
12:55 - 1:20
1:55 - 2:15
2:20 - 2:45
2:55 - 3:20
3:25 - 3:45

My thought is that you can pick and choose the intervals that you want to trade.

Has anyone else given any though to times of day in which to day trade equities?

Please share any ideas and/or observations.

Thanks, Jenny
More...
the first hour is always the best time to trade but usually the most uncomfortable because things happen so fast.
 
I have often believed that the 9:30 AM hour is a particulalry difficult time to trade. Also true for the 1:30, 3:30, 10:30, 12:30, 11:30 and 2:30 hours (a la MT)
 
Hi Jenny,
I agree with you that the "easy" money is made when the market is in full swing. It is my belief that the edge in the intraday trading business resides in the follow thru. I always assume that I am going to be right only 50% of the time but that my profits will be bigger than my losses (+0.2 / -0.1) for example. To achieve this I need follow thru, not choppyness.
But it is difficult to know exactly when those active periods will occur. However, I rarely trade during lunch hours (12-2pm ET) and I avoid the last 15 minutes.
All in all, I think the best time is 9:40 to 12:00, and 2:00 to 3:45. I do not know if this time frame can be fine-tuned because so many things trigger activity intraday, political events, rumors, upgrades/downgrades, Fed meetings, announcements, etc.. But it might be worth a thorough analysis on how to calculate "effective" time zones.
 
Also try this:

Mondays and Thursdays tend to have more volatility.

so, you can make a small fortune trading just 9:30-10:30 AM on Mondays and Thursdays.
 
Right, Ripley. I believe that one needs to be very focused and sharp to trade intraday successfully and focusing on a very effective time frame is a pretty good way to optimize our trading results.
It looks like too many people want to be in the game at all times, for fear of missing out or maybe just being bored doing nothing.
Discipline is not only in money management but also in time management.
 
Jenny,

I agree that there are more optimal times to trade in a day than others. I believe in general the best times are from 9:30-11:30 and 2:30-4:00. East coast lunch time tends to be very slow and choppy. I actually rarely trade the pm. I'm not necessarily a great trader, but I've been doing it a long time and have been doing better since I started only trading the morning. You can track my P/L in the Trader P/L 2006 journal if you like. One thing I will definitely say is that your intervals would seem to be too specific. Things are never exact in trading. I think you are being a bit wishful in thinking that the market will be behaving exactly the same way every day between the very specific trading windows you defined.

One thing I use to help my trading is a 5 min chart of the S&P. If it is in a 3 or 4 point range for the first hour or so, then I consider the day to be pretty slow and choppy. I will trade less. If it is trending or making big moves then I will be more likely to trade more.

Johnny Utah
 
I am currently paper trading a gap up / gap down strategy on one particular stock from 6:33AM to 8AM...it's a nice little trade in the morning before I go to work (I'm on PST time BTW)

It's doing ok, but I'd rather see a better win %...(hence why I'm paper trading it right now)

Win%: 55%
Loss%: 45%
Risk/Reward: 1.5/1.7

I really like the morning volatility... it makes me all fuzzy... :p
 
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