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UrmaBlume

Best Price of the Day

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On well over half of all trading days the price that offers traders the best opportunity happens during the night session. The reason for this is that professional traders in Europe and Asia most often set the tone for the US trading day.

 

Below is a chart showing an overlay of the 24 hour session and the day session in ES. The 24hr session is in Red and the Range of the Day Session is Shown in Blue.

 

It cannot escape notice that in the majority of the day bars below there is red at one end of the bar and blue at the other which means that if an entry had been made at the red extreme it offered a better potential than an entry made at the blue extreme.

Information = Equity

 

The Price that offers the greatest potential most often occurs outside the range of the day session

 

This chart shows the day/nite sessions overlay and the longer term Net New Trade. The second chart down shows the divergence that signaled the top of the whole session which occurred an hour before the open of the day session.

 

Please Click to Enlarge Image

tpt619.jpg

 

The Best price of the day was the high shown below which was indicated by the strong divergence between price and order flow/V94Window.

 

Please Click to Enlarge Image

tpt618.jpg

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The 24-hour trading range, which includes the RTH, is often greater than the RTH range itself? You don't say....

 

More important than the fact that the range is greater is the fact that on most days the tone of the Asian and European traders set, that is lead, the tone for the rest of the day session here.

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More important than the fact that the range is greater is the fact that on most days the tone of the Asian and European traders set, that is lead, the tone for the rest of the day session here.

 

That is not a viewpoint we have in common. Sure, events in Asia and Europe can influence trading here; e.g., tsunami, Greece, etc. But to say that traders in Asia and Europe set the tone for the US markets is a stretch. Especially Asia, which is a follower mostly.

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That is not a viewpoint we have in common. Sure, events in Asia and Europe can influence trading here; e.g., tsunami, Greece, etc. But to say that traders in Asia and Europe set the tone for the US markets is a stretch. Especially Asia, which is a follower mostly.

 

Maybe its better said that the trading that occurs before the open of the day session often sets the tone for the day session that follows and that probably most of that trade is done by professional traders, many or most of whom are outside the US.

 

How one can tell that it is that trade that sets the tone is that on most days the day session extends the range ONLY in the direction of the tone of the night session.

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Maybe its better said that the trading that occurs before the open of the day session often sets the tone for the day session that follows and that probably most of that trade is done by professional traders, many or most of whom are outside the US.

 

Do "amateur" traders, as opposed to your "professional" traders, have any impact on the direction of the market? I think we all know the answer to that question. How much do your "professional traders" impact the market? I guess that depends on who you are counting in your group of "professional traders." Who are the real movers of the market? If you can answer this question you can see that they require something that the people who operate during off hours do not.

 

How one can tell that it is that trade that sets the tone is that on most days the day session extends the range ONLY in the direction of the tone of the night session.

 

This is a remarkable statement. You must have done some research to back it up. Care to share it with the rest of us who monitor the all-sessions and do not see such a correlation? I am sure this whole community would be greatly appreciative.

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That is not a viewpoint we have in common. Sure, events in Asia and Europe can influence trading here; e.g., tsunami, Greece, etc. But to say that traders in Asia and Europe set the tone for the US markets is a stretch. Especially Asia, which is a follower mostly.
Blinking Americans. We just can't stand to think we are the followers in anything can we??? We just gotta be the leaders. Well Urma might have just set us up as the followers! MMM....globalism...anybody can lead....mmm. Urma this is too much surely the US has to set the tone for Europe and Asia??? Please tell me we do.

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That's because the 24hr session and the day session both close at 1315 PST.

 

Just messing with you Urma. Thanks for the charts. Interesting! May not be so good for good ole yank pride??

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As far as retail trade goes, I don't believe it has a meaningful effect on price. I believe retail trade never turns price, never leads price and most often chases price.

 

On the other hand, if you have the means, it becomes easy to see that strong, high intensity commercial trade is present on most session extremes.

 

To get really basic the bar below shows the night session open - the day session opend higher and the day closed higher still - the tone was set in the night session and continued throughout the day. True not all days are this obvious but I wanted to provide an example that plainly demonstrates the point.

 

Please Click to Enlarge Image

tpt621.jpg

 

As to spotting the commercial trade that is strong enough to turn the maket - a combination of The V94 Window and these indicators which detect trade at an intensity and velocity impossible for retail trade do a very good job as shown below. These indicators are part of the pack described in this TL post.

 

Almost everyday, one or more local or session extreme is indicated by these spikes as shown below. The point is that without the right tools it is very difficult to differentiate retail/local trade from the kind of commercial trade that turns the markets. With the right tools you can see it every day. I use the tools described here, how do you differentiage intense commercial trade in real time?

 

This chart shows a night session spike that turned the session and set the tone for the rest of the day.

 

Please Click to Enlarge Image

tpt609.jpg

 

A day session high w/spike:

 

Please Click to Enlarge Image

tpt597.jpg

 

Another session extreme w/spike:

 

Please Click to Enlarge Image

tpt520.jpg

 

In this shot these spikes defined a sesssion high in all three major equity index futures and it happened in all three at the exact same time

 

Please Click to Enlarge Image

101909rpt3.jpg

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* * *

To get really basic the bar below shows the night session open - the day session opend higher and the day closed higher still - the tone was set in the night session and continued throughout the day. True not all days are this obvious but I wanted to provide an example that plainly demonstrates the point.

* * *

 

I understood what you did - overlaying the RTH onto the AS daily bar. My question was if your conclusions were the result of research you did, and if so, would you care to share it.

 

Giving another example, even one "that plainly demonstrates the point," doesn't add anything to further the discussion. I get it that that's what you believe.

 

If the basis of your statements is purely anecdotal, that's fine. My observations differ from yours and thus I would not reach your conclusions.

 

My experience is that the overnight session leading into the open is very informative of how the morning trading will go. By morning, I mean specifically up to around 8:40 to 8:50 pacific time. I do not ascribe this to any particular overnight activity by foreign "professional traders" but to the simple notion that the 6:30 cash open does not affect the ongoing sentiment for the futures market that has been trading continuously overnight.

 

Beyond the morning session, I give what happened overnight less and less weight, except indirectly to the extent the sentiment has carried over into the AM. Midday is mostly for mealtime and calibrating myself for the PM startup. By the time PM trading arrives, the overnight session is irrelevant.

 

These are just my opinions, of course.

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