Time of day as a level

A simple 'trick' for better results

One thing I see over and over in daytrading, is that traders are so eager to start trading.

They sit down just as the exchange opens, and start pressing buttons.

But the truth is: that FIRST hour of trading is THE MOST RANDOM part of the day, direction-wise.

Why do I say that?

As a small team of traders/programmers, we constantly conduct R&D in an effort to explore price behaviours that happen MOST FREQUENTLY.

We look for the highest odds setups that tend to happen nearly every single day.

Guess what! That first hour of trading doesn't really have any notable patterns that can be quantified and anticipated when looking back over the last 500 trading days or more.

Time of day as a level?

If you've attended my daily youtube trading sessions for youtube members (from $9.99 per month), you may have heard me say: "TIME OF DAY IS A LEVEL". 

What does that mean?

It means that I have observed certain price behaviours at a certain time of day, that have a super high chance of behaving in an exactly the same way. With a confidence level of about 70-90%. 

When I say 'confidence level' it's just a fancy way of saying that price has done something on over 70% of the observed days. 

So what is this behaviour?

Price reversals like clock-work

We found that theres a very high chance of price turning around RIGHT after the first hour of trading is over. 

This is especially true on GC and CL (gold and crude oil futures). 

ES also has its own time of day - this info can be found throughout Level 2 of the Market Stalkers Method. 


How to transform your trading

STEP 1:

STOP DOING 5 TRADES IN THE FIRST HOUR OF EXCHANGE OPEN

No matter how liquid the moves look - it's all mostly random. There's only 1 or 2 setups that MAY justify getting involved during this noisiest time of trading. 

Whenever people come to me for coaching, we look at their previous stats and journal of trades done. Most of the losses are nearly ALWAYS during the first hour of trading. 

So it's an easy fix: stay patient and keep your paws off the keyboard and mouse for the first hour. FOMO be gone. Learn the art of JOMO instead: Joy of Missing Out. 

STEP 2: 

After the 1st hour is done, start looking for the setup. If you're trading GC/CL and even forex, this is the time to look for a that high-probability reversal setup. Ideally from some kind of a high odds level. 

Why?

Because as I wrote earlier, there is a SUPER HIGH CHANCE of price reversing after the first hour of active exchange trading. 

If you're trading ES or YM, the timing and price anticipation is slightly different: price frequently stalls for a bit, only to shoot up or down towards the later part of the session. 

Usually if the first attempt at taking the price outside of the first hour of the trading range was successful (meaning the price held outside of the 1st hour trading range), you can the trade in the same direction. 

Because this is when the big institutional traders appear with their longer-term expectations and positions. 


Simple fix for twitchy fingers

This is such a simple fix to start transforming your trading results - staying away from certain times of day. 

If you have trouble clicking buttons when price is wagging around like a rabid dog, then make sure you occupy yourself with something else during that first hour. 

A great saying: Secret of patience is doing something else in the meantime.