most effective times to trade between

[JTrader]

With FTSE shares I trade between 8am-noon and 230-430pm. Over recent weeks with the effect of the Dow I have found it increasingly difficult to trade in the afternoon and that I am best to try and do my trading in the morning, where I have a better chance of predicting the price direction following the previous days close of the FTSE and on Wall Street.

What do others think?

And do you find it best to avoid the often volatile first hour? if not, under what circumstances will you trade something in this first hour?

Thanks for any feedback.

 

[rossored]

I'll trade the US at any time if I see something solid. However, between 5-7pm it normally dries up a bit so I tend to stay away at these times and come back after the US has been to lunch, or I find myself getting whipped in and out of daft trades that I shouldnt be taking anyway.

 

[Crazy Guy]

I like to trade between 0930-1230 and 1500-1630 on the FTSE100, but anytime if the price is OK

 

[Wise Pranker]

I'm happy to trade the ftse any time but have found certain timepoints where the short term trend is more likely to reverse.

Generally I avoid trading before 9am (but sometimes I am tempted to go for a quick buck by a crazy price.)

There is often a change in slope/direction at 11am when the big players roll into the office and start making big trades.

Noon often gets a bit of a reversal as people close out that mornings positions and go to lunch. I'll then generally disappear for an hour unless a strong trend looks like continuing

Any trend that starts around 1pm to 1:30pm stands a good chance of continuing to 2:30 (US open)

After that the ftse generally just tracks the dow.

Obviously none of the above are hard and fast rules but they can sometimes be enough to persuade me to wait a bit before opening a trade or possibly let it run a bit longer than I otherwise would

 

[temporarilylight]

nice summary wise pranker.....guess who's gonna get themselves their first vote!!

 

[DaxTrader]

I'm a trend/breakout trader in Dax and Eurostox, and have researched time of day behaviour over last 3-4 years.

In the above markets there is a dramatic drop off in probablity of a trend trade working after about 11am.

If the market trends early on then circa 10am is often the end of the move, whereas if it ranges for first 2 hours or so, and then breaks, 11am is probably as late as you want to be in a trade.

Ok, you miss a couple of days a month where it keeps going, but you avoid getting chopped the other 19 days. Found this out two ways:

1.by going through months and years of intraday charts, very boring !

2. by doing an "Audit" of when and where I make /lose money - a very worthwhile excercise (noting times of trades). Means trading less but have a much higher strike rate.

For the afternoon don't trade till 3pm to avoid the choppy start, and circa 3pm is often when the mkt gets it's direction for the next hour or so. Again end of this period is less clear , but 4.15 to 5pm (UK) about right, which is also lunchtime in US.

 

[Lambchops]

Dax - I don`t think you are far away with the FTSE either with those times. When do you trade the breakout? 15/30/45 minute range etc.

 

[DaxTrader]

Depends if the range is very definable, after 45 mins at least, if it is sooner trading break can get you chopped up as the mkt gets ahead of itself.
Probably only 10-15% of trades are on that break, use more "visual" levels and ranges and patterns to enter mostly.

 

[Loada Dosh]

I have learnt by personal experience not to trade at the opening but to wait at least half an hour or so until the price settles down. As to waiting for trends during the day, put forward for example by Wise Pranker, I never let that determine my trading. and believe charting is one of biggest cons and myths of all time. When you look into it you find there is no scientific proof for it whtever.

But then I'm not a day trader and my objective is to retire at 45, I'm now 26, so nearly all of my trades have a long term perspective.

I use averaging down a lot which is making me big profits at the moment as the techs recover. If I see a weakness in price on one of my selected shares during the day, and it is after 9.00 which is the time I get to work, and of course I have the dosh available, I buy.

 

[sidinuk]

I never let that determine my trading. and believe charting is one of biggest cons and myths of all time. When you look into it you find there is no scientific proof for it whtever.

Welcome to T2W, that's one hell of an entrance!

 

[Wise Pranker]

Please don't take this guy seriously he is just a wind-up merchant. He is my own private stalker having followed me around the Ample BBs for years posting abuse and random drivel

I've alread requested his post (and him) be removed from t2w and suggest you add him to your ignore list.

 

[candles]

good luck with your retirement....hahaha

 

[Wise Pranker]

LOADA TOSH

You say
<...believe charting is one of biggest cons and myths of all time. When you look into it you find there is no scientific proof for it whtever....>

1) Lets assume that you are correct and that charting does not work.
2) Fact - there are a lot of people who believe ion charting and when they see a buy signal they will buy.
3) Fact - if demand increases then share price rises.

Lets now assume that a chart shows a buy signal.
By 2) all the chartists will buy
By 3) the price will rise.
So therefore if there is a buy singal on the chart then the price will rise. Kind of contradicts your assumption that charting doesn't work.

How about you prove it doesn't work rather than asking others to prove it does. Knowing how open minded you are perhaps you should actually look into it rather than just slagging it off.

Have fun W.P.

 

[Trader333]

Wise Pranker,

I am not condoning the views of your adversary but the fact is that when chartists see a buy signal someone has to take the other side of the trade and so must have the opposite view.

Therefore they either read the same chart differently or they dont use charts in the same way. So one half will be right and the other wrong depending upon which way the market moves.

I have found that charts work differently depending upon your preferred style of trading. If you are a trend trader then you will be taking money off the support resistance traders when a breakout occurs. In the same way a support resistance trader will take money off the trend trader when a breakout fails and the market reverses.

So which chart is right ? The answer I think is that both are at different times and then you have the volatility breakout traders as well as others etc

For me charts are only of use for setups and nothing else as there are other far more accurate indicators in terms of trading probabilities that can be used but which I am not at liberty to discuss.

Paul

 

[oatman]

I disagree on the point about taking the opposite view on a chart breakout.
There are many reasons for opening or closing a trade. A hedge for instance.

 

[Wise Pranker]

Agreed there are loads of different trading styles and there is a lot of subjectivity in the way the charts are read and the way that different traders react to the same reading of the charts.

However, the argument that whenever somebody is buying means that somebody else is selling doesn't really counter the argument.

If demand suddenly increases then the market reacts by trying to balance supply and demand, it does this by raising the share price to reduce the demand and raise the supply until they are equal again. ie they are only matching sellers for the buyers cos the price rises.

 

[Trader333]

Oatman,

The point was specific to chartists and not to everyone that trades. The issue was that trading styles determined by charting techniques can be contrarian in nature, ie a trend trader verses a support resistance trader reading the same chart are likely to take the opposite side of the same trade and if you then take all the other trading styles into consideration it becomes very interesting.

It would be good to know if the alleged 5% of succesful traders use charts and if so how are they using them ?



Paul

 

[frugi]

I think the time factor is also key. For instance while a valid buy signal occurs on a 5 min chart for one trader, a valid sell signal may simultaneously occur for another trader using a 60 min chart. One might be a scalper, the other a swing trader. The beauty is they can both be right and eventually make money despite taking what looks, initially at least, to be a totally opposing view. The scalper might be buying for a quick 5 ticks profit while the swing trader's stop loss may be double this amount as he views 5 ticks as mere noise and is looking to take 50+ ticks on the way down.

 

[DaxTrader]

Interesting WP and T333

Thing is, there isn't much use in thinking about who you are giving money to or taking money off, all that matters is if you on balance are profitable.

Although I am a trend trader, I do sometimes go against the trend because having spent ages trying to get better exits , sometimes see an extreme and can't resist going against the trend, if only briefly.
I use charts, and have done since 97', and don't use much other technical input other than time zones (which also tends to concerntrate in the more liquid times), and I sometimes trade off news, but that is all.
Have found it is much easier to spot patterns, whether conventional or just self taught patterns, if you print out charts and walk through swings with a pencil, on the screen is too uninvolved to get the feel.

edited for appalling spelling :|

 

[oatman]

Trader333, With you now