Why am I doing better in the afternoon?
- Thread starter kmiklas
- Start date
If you are doing things wrong in the morning, its because you are fading the first moves of price action and order flow.
This is common for people starting off who are new to the game. Most successful scalpers make their money in the first and last hour of the day because all the big money gets done then.
What you need to start looking at is the price action and behaviour in the morning. Pay close attention to the prints, the bids and the offers, and other correlated markets. If its in Bonds for example, have the 5yr/10yr/20yr up for U.S. and see whats leading. If its in S&P, watch the Eurostoxx and Dax as well.
You can start to see the big players trying to push things somewhere to scalp out their profit.
The reason why you might be doing better in the afternoon is because you may be taking contrarian trades which look strong/weak but because its hte afternoon with less volume and less players, it comes back and pays you. Youre probably making money off the 'smart' people trying to make their losses back from the morning!
If you are a scalper then trading the afternoon session is like being at a Poker table with 2 professionals and only 1 whale. You'll just get beat. Being in the open session with all the volume is like being on a Poker table with 2 professionals + 7 gambler whales who are there just asking to give their money away.
Have a look at your risk/reward in the morning. How much do you risk and how much do you make. Whats the percentage win rate youre looking for?
I can tell you first hand that as soon as I remove afternoon trades from me or any of my trades, the PNL goes up not down. So you need to identify why you are placing trades going against the volume..
This is common for people starting off who are new to the game. Most successful scalpers make their money in the first and last hour of the day because all the big money gets done then.
What you need to start looking at is the price action and behaviour in the morning. Pay close attention to the prints, the bids and the offers, and other correlated markets. If its in Bonds for example, have the 5yr/10yr/20yr up for U.S. and see whats leading. If its in S&P, watch the Eurostoxx and Dax as well.
You can start to see the big players trying to push things somewhere to scalp out their profit.
The reason why you might be doing better in the afternoon is because you may be taking contrarian trades which look strong/weak but because its hte afternoon with less volume and less players, it comes back and pays you. Youre probably making money off the 'smart' people trying to make their losses back from the morning!
If you are a scalper then trading the afternoon session is like being at a Poker table with 2 professionals and only 1 whale. You'll just get beat. Being in the open session with all the volume is like being on a Poker table with 2 professionals + 7 gambler whales who are there just asking to give their money away.
Have a look at your risk/reward in the morning. How much do you risk and how much do you make. Whats the percentage win rate youre looking for?
I can tell you first hand that as soon as I remove afternoon trades from me or any of my trades, the PNL goes up not down. So you need to identify why you are placing trades going against the volume..
It depends in which time-zone you live, what you're trading, and how.
For many years, I consistently did better during the afternoon than the morning, overall, because I used to trade primarily EUR/USD and Cable, and am in Europe, so for me the afternoon was the time that both London and New York were simultaneously in their RTH, volumes were higher, and price-movements were more stable and reliable.
Now I trade mostly US index futures, so again the afternoon is much better for me, because that's the US morning, when the US indices see most of their volume and again the volumes are higher (I trade from constant-volume bars, and of course there are more of them - so more trading opportunities - when volume's higher, during the US morning).
Just a friendly reminder of the value of a trading journal, whether online, offline or paper and pencil. Even if you've figured out what's going on for you right now, this practice will serve you well in the future as well. Include any variable that you think might be relevant: how you're feeling, time of day, a characterization of market behaviour or type, the type of strategy, your motivation(s) for your entry and exit, your entry and exit prices, PL on the trade, etc. See if patterns develop and then try to address them. I suspect this is even more valuable for discretional traders than systematic traders.