Time of Day Bias for ES

[NihabaAshi]

Quote from mhashe:

whats the logic behind the 10:30 reversal? It's very consistent

Hi mhashe,

The reason why there are consistent reversals at/near 1030am est is related to the fact that this is when key economic reports and key schedule market events are ocurring.

On trading days where the reversals occurs around 10am est...same reasons as the above.

On trading days when there's no key economic reports nor any key scheduled market events...

Between 10am - 1030am est look for divergence patterns via any method you have confidence in.

If your not into divergence methods...

A few key candlestick patterns will do.

If your not into divergence patterns nor candlestick patterns on these non-report or non-event trading days...

Pay close attention to what's being hyped or the talk of the town in the markets (treasuries, energies, hot sector leading the way up or down, european markets et cetera) and monitor its price action to help give you clues about your trading instrument.

Next...take profits fast (if profitable) and/or exit most of your profitable position then let the small remainder ride just in case you got lucky and caught something that will have continuation price action on those non-report or non-schedule event trading days.

The above has been the consistent pattern for the +15 years I've been trading.

Been using divergence analysis since the 80's and candlestick analysis since the 90's.

Last of all, I know some traders that only open trading positions between at/near that 10am - 1030am est window of price activity.

One of them once said its like knowing when the bully is going to throw his punch...

The outcome of the fight will be dependent upon our ability to exploit that punch.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

 

[martys]

Quote from NihabaAshi:

Hi mhashe,

The reason why there are consistent reversals at/near 1030am est is related to the fact that this is when key economic reports and key schedule market events are ocurring.

On trading days where the reversals occurs around 10am est...same reasons as the above.

On trading days when there's no key economic reports nor any key scheduled market events...

Between 10am - 1030am est look for divergence patterns via any method you have confidence in.

If your not into divergence methods...

A few key candlestick patterns will do.

If your not into divergence patterns nor candlestick patterns on these non-report or non-event trading days...

Pay close attention to what's being hyped or the talk of the town in the markets (treasuries, energies, hot sector leading the way up or down, european markets et cetera) and monitor its price action to help give you clues about your trading instrument.

Next...take profits fast (if profitable) and/or exit most of your profitable position then let the small remainder ride just in case you got lucky and caught something that will have continuation price action on those non-report or non-schedule event trading days.

The above has been the consistent pattern for the +15 years I've been trading.

Been using divergence analysis since the 80's and candlestick analysis since the 90's.

Last of all, I know some traders that only open trading positions between at/near that 10am - 1030am est window of price activity.

One of them once said its like knowing when the bully is going to throw his punch...

The outcome of the fight will be dependent upon our ability to exploit that punch.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

Hi Mark,

I am not sure I am reading this correctly. Is there any difference in trading the days with economic reports and the days that don't?

Thanks.

 

[StreamlineTrade]

Quote from NihabaAshi:

Hi mhashe,

The reason why there are consistent reversals at/near 1030am est is related to the fact that this is when key economic reports and key schedule market events are occurring.

?



Most of the significant reports are released at 8.30 ET before the US equity markets are even open.

Personally I would never build a strategy on the time of day. Sounds too much like moon cycles to me. I don't think seasonal patterns or any pattern are that reliable the smaller the time frame.

But then, if you are making money with it then great!

 

[martys]

1-13-2006 reversal (2 pts) review : S for setup; T for trend

9:30
9:55 S
10:46 S
11:32 T
12:50 S
1:30
2:15 S T
2:54 S
3:22


Tally: #days = 3

Time #Reversals #Setups #Trends
9:30 1 0 0
10:00 2 2 0
10:30 2 1 0
10:45 1 1 0
11:00 2 1 0
11:30 2 0 1
11:45 2 2 1
12:45 1 1 0
1:00 1 0 0
1:15 1 1 1
1:30 1 0 0
2:15 1 1 1
3:00 1 1 0
3:15 1 0 0
3:45 2 1 0

 

[NihabaAshi]

Quote from StreamlineTrade:

?



Most of the significant reports are released at 8.30 ET before the US equity markets are even open.

Personally I would never build a strategy on the time of day. Sounds too much like moon cycles to me. I don't think seasonal patterns or any pattern are that reliable the smaller the time frame.

But then, if you are making money with it then great!

Hi StreamlineTrade,

You misunderstood mhashe question and my response to it.

I don't use a strategy that's dependent upon the 10am - 1030am est price action window.

My strategies appear anytime of the trading day or anytime during the week.

However, when someone ask why are reversals common place in that particular price action window...

I gave an explanation of why to mhashe question and you assume I said to build a strategy based upon time of day.

Yet, I do know some traders that prefer to only look for trade signals in the price action window in comparison to any other time of the trading day because they feel the odds are more in their favor there's enough follow-through to their profit targets than when their trade signals appear any other time of the day.

Last of all, the issue isn't really what reports are the most significant or the least signficant.

I've seen 0830am est reports fizzle and barely produce a price reaction just the same as 00945am reports, 10am reports, 12noon est reports and so on.

Once again, the question was why do reversals in the price action occurs at those specific times (at/near)???

The answer to that question is that its directly related to key economic reports or key regular schedule market events...

Nothing confusing about that fact nor answer.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

 

[NihabaAshi]

Quote from martys:

Hi Mark,

I am not sure I am reading this correctly. Is there any difference in trading the days with economic reports and the days that don't?

Thanks.

You mean is there a difference among the price action between 10am - 1030am est on trading days with key economic reports in comparison with trading days without key economic reports.

Well...that's an easy answer.

Click on the below link and review the past year worth of info and compare your charts for the 10am - 1030am est price action window.

http://online.wsj.com/public/resources/documents/b-econoday.htm

For my methodology...yes there is a difference via knowing why price is doing what it is doing.

I remember someone here at ET posted a question about 15mins after a 2:15pm est FOMC announcement about why the sudden parabolic price movement.

Someone replied and said it was the FOMC announcement.

The guy then replied back and said...

Is that a market mover?



Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

 

[HooLee]

Quote from NihabaAshi:

I remember someone here at ET posted a question about 15mins after a 2:15pm est FOMC announcement about why the sudden parabolic price movement.

Someone replied and said it was the FOMC announcement.

The guy then replied back and said...

Is that a market mover?



Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

ROFL !

Time of day and seasonal patterns are all in my book, without much care about the reasoning though.

Why not use them to confirm our trading setups? There is no one single strategy that works all the time in all markets. To "guess" when and why it fails we can simply use confirmations from other strategies, and time of day can be one of these other strategies.

To me it is pretty logical, people trend to do certain things in certain time, its the tendency and habits. Grass is green in Spring and leaves fall in Autumn, it confirms to mother nature too. Don't belive me? Today can be an example, market is in a bear cycle (correction) but today it failed to selloff. Why? I look at the calendar on the wall, it says "New Moon" ...

Tendency, isn't it trading all about?

 

[HooLee]

Quote from HooLee:

calendar on the wall, it says "New Moon" ...

Correction: "Full Moon"

 

[martys]

Quote from HooLee:

Correction: "Full Moon"

According to the Chinese Lunar Calendar, today is the full moon... not yesterday but I am sure lunar cycles has some significance... actually there is totally reversed esoteric relationship (according to Buddhist tantra) that might be improper for me to comment.

Lunar Cycles, time of day, etc has been around for a long time and I think if trading is that easy then everybody going one way will surely break the patterns. But then again there might be some other forces at work (e.g. greed and fear).

 

[porgie]

If system tells you when to enter and exit very clearly and from end to end of run , WHY it did that and at what TIME with how much VOLUME is not important , is it? If I am incorrect .....please inform....