Monday, February 29, 2016

10AM is the New 11AM in These Current Market Conditions

10AM is the New 11AM in These Current Market Conditions

I've said in a prior post that generally speaking lull usually starts around 11AM EST because mainly that's 1 hour before 12PM EST so people are starting to get ready for lunch in the east coast and also people on the west coast have placed their morning trades and are now off to work.  However since about the end of January/beginning of February the market activity has diminished greatly.  With lots of macro forces such as oil, gold, China, the Brexit from the EU, etc... pulling the market in all sorts of directions in an economic see-saw battle, we've seen lots of uncertain, choppy, low volume action which rather that starting at 11AM EST, has been commencing as early as 10AM EST, giving us really only 30 minutes of easy, high percentage trades for the AM session, which really sucks...

That's not to say that it's impossible to make money in this market, but it's definitely gotten harder due to the fact that there are less opportunities and once the volume dries out, we all know that trading into the lull hours when the algos take over is basically like handing your money on a silver platter to the market makers.  Without making this post overly wordy, I'm just going to post a few charts of a few recent stocks that were in play and let them do the talking. 





So as you can see the window for us to find easy trades with very high edge has undoubtedly dwindled in this market.  But remember the market is variable and we must always adapt.  Trade with discipline, walk with profits when you see the edge is gone.  Don't develop FOMO when you miss a big move and then trade into the immediate chop that ensues when the liquidity vanishes.  

Yes I know it's a shitty feeling when you hesitate or fumble your orders and don't get filled on a big money trade and that turns out to be the only good trade of the day and you're left with bread crumbs after. But take it from me, you've got to mustard the discipline to walk away even if you're up 0 or slightly negative because once the liquidity disappears and the algos take over after, you're going to be taken for a ride you wish you didn't get on...

I've ended my mornings at 10AM EST the past 3 trading days and ended up with 3 straight days of $2K+ profits after a shit show of a performance before that where I pretty much bagheld an MBLY short past 10AM nearly to 11AM and lost five figures.  Always make changes to your strategy as the market changes! 

Good luck and be safe out there guys.



  1. Just came across you, love your stuff man!

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