Trading Success Principles Key Times of Day · Day trading the E-mini futures contracts in my own...

© Trading Concepts, Inc.

Trading Success Principles

Key Times of Day

© Trading Concepts, Inc. 2

Trading Success Principles Key Times of Day

By Todd Mitchell

© Copyright 2014 by Trading Concepts, Inc.

All Rights Reserved

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based on market observation and years of experience. Therefore, the thoughts

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Table of Contents

Key Times of Day.................................................................................... 4

Key Times of Day SUMMARY ...................................................................... 5

MORNING Price Action: 10:45am ET to 10:45am ET ....................................... 6

LUNCH Price Action: 11:45am ET to 1:00pm ET ............................................ 9

POST LUNCH Price Action: 1:00pm ET to 2:00pm ET .................................... 11

AFTERNOON Price Action Move: 2:00pm ET ............................................... 13

DELAYED AFTERNOON Price Action Move: 3:00pm ET .................................. 15

Logical Price Targets and Profit Objectives for Afternoon Moves ..................... 17

Quick Summary of the Key Times of Day .................................................... 19


Key Times of Day

This training module is an important part of the E-Mini Success Formula. Since I’m

here to show you how to master the E-Minis on an intra-day basis, please pay close

attention, because becoming a professional day trader requires you to understand the

natural ebb and flow of how the stock index futures (i.e. e-minis) trade on an intraday basis. You will be amazed at how predictable the market can be when you

completely understand these key times that I’m about to show you. This module is

like a roadmap in knowing how and when to trade the e-mini futures intraday. This information will greatly help you in determining what the e-mini futures market

should do, and most importantly, when they will most likely do it with incredible

accuracy. Day trading the E-mini futures contracts in my own personal trading

experience (by day trading the S&P 500 since 1988 and then the e-minis since inception in 1997) is perhaps one of the most predictable markets, in terms of when

and where the market should make reversals and resumptions (of prior price trends)

throughout the trading day.

The E-Mini futures (along with many stocks that closely follow the e-minis) have a

somewhat definable time pattern that occurs at consistent intervals throughout the trading day. Although this isn’t 100% accurate (nothing is though), it’s powerful

enough to help gauge what the market "should do" and "when" it should do it. These

patterns occur frequently and consistently enough to make it a very, very valuable

trading tool to have at your disposal during the trading day.

Alright, here we go. I have broken down these Key Times of Day in a summary below.

I will then elaborate on each one of these Key Times you need to pay special attention to.

Key Times of Day


Key Times of Day SUMMARY

MORNING Price Action: 10:15am ET to 10:45am ET - expect a counter-trend move

of some sort in the first 45 to 60 minutes of the day’s trend or bias, if there is one.

POST LUNCH Move: 1:00pm ET to 2:00pm ET – expect a resumption of the overall

day’s trend (or upward or downward bias of the day) if:

(A) The overall trend is UP and the market is trading DOWN off the high of the

day, or

(B) The overall trend is DOWN and the market is trading UP off the low of the

day.

AFTERNOON Move: 2:00pm ET (give or take 15 minutes) - expect either:

(1) A resumption of the day’s trend if there was no move from 1:00pm to just

before 2:00pm, or

(2) A counter-trend move of the day’s trend if the market is testing the high

or low of the day.

DELAYED AFTERNOON Move: 3:00pm ET (give or take 15 minutes) - the 2:00pm

move will help dictate what may happen at 3:00pm. Expect either:

(1) A counter-trend move of the day’s trend if the market is testing the high

or low of the day, OR

(2) A resumption of the day’s trend if a counter-trend move occurs around

2:00pm and the market is trading down off of the high of the day in an uptrend or up off the low of the day in a downtrend.

Alright, let’s delve a bit deeper into each one of these Key Times of Day so you have

a better understanding of what to expect at each of these times. You will also see

chart examples showing exactly what I’m trying to teach you here.


MORNING Price Action: 10:15am ET to 10:45am ET

The price action from the trading days open (9:30am ET) to about 10:00 to 10:30am ET is usually what determines the outcome for the rest of the trading

day. If there is a relatively large move (up or down) in the first 45 to 60 minutes of

trading without any significant pullback (i.e. retracement) in and around 10:15 ET to 10:45 ET, I would then expect the likelihood of a trend day in that direction (up or

down) to continue. This is not the norm though; I would say this happens only about

20% to 30% of the time where the market trends beautifully without really pulling back very much. Therefore, I look at the market around 10:15 ET to 10:45 ET for the

potential counter-trend move (i.e. a move against the first 45 to 60 minutes trend,

or bias, if there is one). This is the norm, which occurs roughly 70% to 80% of the

time. A significant pullback would mean a 60% retracement (or more) off of a particular market move in the morning. This would indicate a normal trading day,

which in turn means that the e-minis should not trend strong in either direction.

Market immediately TRENDS UP without any Significant Pullback

(occurs only about 20% to 30% of the time)


Market immediately TRENDS DOWN without any Significant Pullback

(Occurs only about 20% to 30% of the time)

Normal Retracement and Reversal of First Hour’s UP Trend

(10:15am ET to 10:45 ET)


Normal Retracement and Reversal of the First Hour’s DOWN Trend

(10:15am ET to 10:45 ET)

So, expect some type of counter-trend move between 10:15 to 10:45 am ET. This

first 45 to 60 minutes of trading helps determine (with fairly high accuracy) what the

rest of the trading day will most likely entail. Of course this is not perfect by any

means, but it will help equip you better in knowing what type of trading day is most likely to occur.


LUNCH Price Action: 11:45am ET to 1:00pm ET

This is perhaps the dullest and least volatile time of the trading day. A majority of the time, for the most part, this time period is when the market is the least volatile

and makes the smallest swings during the day. Even when the market is having one of

those really strong trending days, during this time period the market doesn’t typically make strong moves during this time. This is probably due to the fact that most

traders (and floor traders too) seem to be having lunch and taking it easy during these

times.

Lunch “Dull” Price Action (Mid-Day Doldrums)


Lunch “Dull” Price Action (Mid-Day Doldrums)


POST LUNCH Price Action: 1:00pm ET - 2:00pm ET

The market at this time is expected to resume its trend (for the day) if there has been one up to that point in time, or even if there’s a bullish or bearish bias for the

day. The market will typically move toward the high or low of the day, depending

on the trend or bias up to that point. It is this resumption toward the high or low of the day that allows one to identify this post lunch move. Therefore, the market

should attempt to rise or fall in the direction of the day before being reversed with

the afternoon move (discussed next) in and around 2:00 ET.

For example, if the market is in an uptrend or has an upward bias and price is a

few points from the high, expect the market to rally towards the high of the day.

This will enable you to look to go long, expecting the high of the day to be tested. If the market is in a downtrend or has a downward bias and price is a few points

from the low, expect the market to selloff towards the low of the day. This will

enable you to look to go short, expecting the low of the day to be tested. This move can start anywhere between 1:00 - 2:00 ET.

In a non trending day, where there is no real bias to the day it is a little harder to

decipher what the market is going to do. That’s fine though, when in doubt stay out and do nothing is what I always say. Although, during these times the market may

still try to test the day’s high or low, or an active high or active low. And it may

very well be that the market remains calm and dull until either 2:00 or 3:00 ET.


POST LUNCH Price Action (in an UP Market)

POST LUNCH Price Action (in a DOWN Market)


AFTERNOON Price Action Move: 2:00 ET (give or take 15 minutes)

This is what I call the AFTERNOON Move. This afternoon move is going to try relieving the buying or selling pressure of the market by trying to move the market counter

(i.e. against the trend) to the (trend or bias) direction of the day up to that point.

The high or low of the day should be retested in and around this 2:00 time.

For example, if the market is in a down trend, the market retraces up off the

low and starts to head down to retest the low of the day, the market should then retest the low of the day in and around 2:00 ET, thus failing and creating a

bounce up off this level. The market should then hold these levels until roughly

3:00 ET in which time the market should again turn and resume its trend for the

day. This is typical price action in the e-mini futures market. Let’s look at some examples below to see what I mean.

AFTERNOON Price Action Move (in an UP Market)


AFTERNOON Price Action Move (in a DOWN Market)


DELAYED AFTERNOON Price Action Move: 3:00 ET (give or take 15 minutes)

If the market does not move off the high or low of the day in and around 2:00 ET, I then expect the move to occur around 3:00 ET. Therefore, the market either

resumes its trend for the day around 3:00 ET, or the afternoon move off the high

or low of the day takes place at this time.

If the afternoon move off the high or low of the day occurs at 3:00 ET, expect the

move off the high or low to be larger than if it were to occur at 2:00 ET. This means

that the market will completely ignore the move at 2:00 ET, thus jamming the market higher or lower until around 3:00 ET.

Remember, the move at 3:00 ET should be much more powerful than the one at 2:00 ET, if the afternoon move off the high or low of the day occurred at all at 2:00 ET.

DELAYED AFTERNOON Price Action Move (in an UP Market)


DELAYED AFTERNOON Price Action Move (in a DOWN Market)


Logical Price Targets and Profit Objectives for Afternoon Moves

If you should have a trade on, are the retracement levels for that day, or some sort of other support or resistance level that makes good logical sense. These moves off of

the high or low of the day around these times should take the market back to one of

the day’s Fibonacci levels (i.e. 38%, 50%, or 62%) of the day, depending on the strength or weakness of the market for the trading day. This is a good guide to where

the market can and should bounce or react to during these afternoon moves off the

high or low of the day.

Logical Price Targets and Profit Objectives for Afternoon Moves (UPTREND)


Logical Price Targets and Profit Objectives for Afternoon Moves (DOWNTREND)


Quick Summary of the Key Times of Day

Please remember, these are general guidelines where you normally would expect

some type of move in price action depending on where the e-mini futures market is

trading at that particular time.

3 General Statements concerning these Key Times of Day:

1) Always know what time it is and know what to generally expect at these

times. 2) These Key Times of Day are only a general rule of thumb of what to expect

in the market.

3) There must be a trade set-up providing the technical reason to trade.

Once again, I want to stress that these Key Times of Day are great general time patterns for the e-mini futures markets, along with stocks that mirror the e-mini

futures. Nothing is perfect, however knowing these key times will help give you an

edge over other day traders that aren’t aware of these times. I do however feel that

the 2:00 ET and 3:00 ET times are real important to be aware of for the e-mini futures day trading session because of the buying and selling pressure that usually

comes in the market around these times. Also realize that the volatility in the market

also increases during these afternoon times. So, when you start applying everything else taught in this mentoring program along with knowing the regularity of

these key times of day price movements in the e-mini futures market, you will be

truly amazed at how precise and accurate your entries and exits will be, which will

make you a much better trader.


Key Times of Day

MORNING Price Action: 10:15am ET to 10:45am ET - expect a counter-trend move

of some sort in the first 45 to 60 minutes of the day’s trend or bias, if there is one.

POST LUNCH Move: 1:00pm ET to 2:00pm ET – expect a resumption of the overall

day’s trend (or upward or downward bias of the day) if:

(A) The overall trend is UP and the market is trading DOWN off the high of the

day, or

(B) The overall trend is DOWN and the market is trading UP off the low of the

day.

AFTERNOON Move: 2:00pm ET (give or take 15 minutes) - expect either:

(1) A resumption of the day’s trend if there was no move from 1:00pm to just before 2:00pm, or

(2) A counter-trend move of the day’s trend if the market is testing the high or low of the day.

DELAYED AFTERNOON Move: 3:00pm ET (give or take 15 minutes) - the 2:00pm move will help dictate what may happen at 3:00pm. Expect either:

(1) A counter-trend move of the day’s trend if the market is testing the high or low of the day, OR

(2) A resumption of the day’s trend if a counter-trend move occurs around 2:00pm and the market is trading down off of the high of the day in an

uptrend or up off the low of the day in a downtrend.

Trading Success Principles Key Times of Day · Day trading the E-mini futures contracts in my own...

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