Daytraders Bulletin Logo

Daytrading Tips & Tricks

S&P 500 Corner

FREE E-book:
Tips, Tricks & Techniques
for Day Traders
Daytrader's Bulletin Method  |   S&P 500 Corner  |   Nasdaq Nuggets
Technical Analysis  |   Mind & Money  |   Day Trade Management
Day Trading Articles  |   Newsletter for Active Day Traders

 

Mailing List Trade News, Articles & What's New

 

Want to know when new tips are added?  Add your name to our mailing list for our e-mail updates. This list will not be sold, traded or given away.

 

Recommended Reading

 

Search Daytrader's Bulletin


 

Why You Should Trade the First Hour

Statistics tell us that the great majority of the time, one end of the daily price range of the S&P 500 occurs within the first hour of trading!  Consequently, if we can place a winning trade in the first hour of trading, we'll have terrific trade placement. If one of those 2000+ point trending days occurs, we'll have a big payday. 

On days that persistently trend 1200+ points, it's critical to get aboard the move early. Why? Well, after the market has trended 800+ points, most traders are anticipating the reversal and are very reluctant to go with the trend. 

By trading the first hour, I usually do not mean the first 25 minutes or so; this period's bid-ask spread (also known as the opening bulge and amateur hour) is too great and price frequently reverses around the 9:00 Central Time Cycle Timing point. We should therefore usually not enter before 9:00.  Sometimes, there may be compelling reasons to enter earlier but this is usually a mistake.

Market Turning Points - Price Action

There are certain price patterns that can substantially help us determine market reversals. Observing these potential reversal points in conjunction with the Cycle Turning Points and the Support/Resistance Tables found in the Overnight Update can substantially increase our profitability. Some of these price actions indicating reversals are:

A doji at an intermediate high or low associated with a sharp rise in volume. (See Candlestick Patterns - an Overview for further information on Doji)

A one, two, or three tick new high or new low.

A sharp rise in volume.

A penetration of a Bollinger Band.

A quick market move up or down with little or no follow through.

I strongly suggest that all traders consider the above factors prior to trade entry.

Additionally, statistics suggest that there are two periods during the day in which the occurrence of trends is  most likely. These trending periods are 8:30 to 10:30 and 12:00 to 3:15 CST.

Also, be very aware that the market is fueled by volume. The market seeks out price levels where volume is greatest; i.e. where the stops are located. Where are the stops located? At the intraday highs and lows.

Next: Case Studies of Market Turning Points


  More Tips  More Tips
  Home   |   Real Time Signals   |  Day Trading Newsletter  |  Trading Results
Daytrading Tips  |  Trader's Tool Box  |  Day Trade Links  |  Contact Us
Privacy Policy  |  Site Map
Top
Copyright 1997-2009 Daytraderís BulletinThere is a risk of loss in futures trading.
Contact Us New at Daytrader's Bulletin Daytrader's Tools S&P 500 Corner Daytrading Tips Daytrading Results Subscribe / Free Trial S&P 500 and Nasdaq Signals Daytrader's Bulletin Home