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.
$PTCT
$RATE
$MBLY
$SUNE
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.
Madaz
Just came across you, love your stuff man!
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ReplyDeleteGenuinely good work. Keep it up
ReplyDeleteMadaz,
ReplyDeleteBeen following you for awhile on Twitter and trying to master your trading style.I really appreciate all of your insights and comments,one question though,how in the world do you manage to get both Trade Ideas & Benzinga Pro for anywhere near 130.00 a month,you must have one hell of a hook up.
so true. I also agree with you. FXB Trading provides an e-book on the basics of Trading and it really helps me when I trade.
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