End of Day Price Action

[bttrader 10]

I am just curious if anyone else has been watching/trading the price action at the end of the day. I have been a day trader for about 7 years and typically trade the morning session for approximately 2 hours then I am done for the day. I trade primarily the Dow and Russell index futures. The price action over the last 2-3 weeks in the afternoon session has been very active and actually giving me better/easier trades and also allows me to trail a portion of my position for more profit. This price action reminds me a lot of what we saw in the fall of 2008 when we would get big swings both ways in the market at the end of the session. One of my favorite setups is counter trend at the end of the day, especially if we are at the high or lows of the session. I am interested in hearing from any other traders who focus on this part of the session and how you approach it.

[Tams 20]

can you post a chart to illustrate?

[ytuokm98 10]

I believe Carter at TTM has done some work on the afternoon session. Particularly, a counter-trend trade at 14:52 CST.

[windsurfer 10]

2 observations about late day trading:

 

1. If you look at the last hour, you will find that trend continuation has been profitable almost every year except 2009 (when trend reversal was profitable, especially when the trend that day had been down).

 

2. If you look at the last 30 minutes, you will find that it is the 30 minute period of the trading day most likely for a long position to show a gain.

[TheDude 10]

Here are some stats from EW for the last 90 days of ES. Don't ask about the moon phases and cycles....that comes as standard.

[TheDude 10]

Sorry - This attachment may be more useful. It shows that out of the last 90 days, 23 days made the high/low in the afternoon. Daily range, open etc are shown for those 23 days.

 

Hope it helps.

[cuttshot 11]

bttrader,

 

I am on again off again with the afternoon session. The problem I have with it is the lack of consistency. I have found that it will heat up for a period of a couple of weeks and then just completely die off. This makes it difficult to stay consistent with a trade plan.

 

When I do look at the afternoon session on the index futures I like to come back right around 2:00 EST. I typically will look for one nice move. I trade the NQ and TF when I do trade in the afternoon. On the TF I will typically look for a move around 2 points or so. On the NQ it's right around 4 points. If I can catch one win in the afternoon I consider it good.

 

With what we have seen here lately you could also consider the final hour of trading as well. I just don't feel as confident in the afternoon so I try to get in and out as quick as possible.

[Chouca 10]

The Dude,

 

that was very interesting statistics!!! Thanks a lot!

 

Is there a chance You can do it also for June and FESXU0?

[WorldTrader 10]

I look the last Hour for trading the ES or NQ or DOW. With CL you can start early. Here are the last 2 trades of the day 24 Cents each! I will start tracking it. I am not able to trade the afternoon every day, but I can at least start a spreadsheet I will share.

[Jay McKean 10]

I have been trading FX end of day candle stick charts based on price action for few yrs. Candle stick patterns with added confluence such as fibs, support and resistence, RSI divergences have been very successful. No reliance on lagging idicators and average reward 2:1 provides an excellent edge.

[WorldTrader 10]

Jay,

Welcome. How is that going? What sort of win loss rate to you have and about how many pips is your average trade?

[Jay McKean 10]

Hi World Trader,

 

Depending on the pair. I trade 12 pairs to ensure plenty of trades over a year. This also gives me the opportunity to be very picky on trade setups. The pairs range between 60-75% win/loss but I also ways aim for between 2:1 reward to risk and 3:1 reward to risk. As you can imagine even 50% win rate would be very profitable over the long term. Average stop 100-200 pips. But using fixed ratio position sizing, it doesn't really matter because the risk is always the same.

 

Cheers,

Jay