Q: Hi Toni,
Is there a time of the day that is better for trading than other times?

A: One of the things I really love about the markets is that they are markets – plural. This means I can trade virtually any time of the day or night and find something to keep me busy! It really is the perfect career for someone whose schedule can be rather hectic. With a newborn in the house, my schedule now has to work with that of my new boss. Sometimes this means trading index futures and forex in the wee hours of the morning, while at other times I might have only a few hours when the market opens in New York. In that case, I tend to focus primarily on gaps and momentum moves in stocks.

However, there are times of the day that are the most favourable to particular markets and strategies. There are also specific times of the day when you have the best chance of catching the stronger intraday swings and reversals from the beginning.

First, let’s look at some of the different markets. The index futures and forex offer great opportunities for trading throughout the morning hours in the (US) Eastern time zone (ET). However, certain times are better than others. Things tend to pick up in both the forex and futures markets once the markets open in Europe. It is not uncommon to see extreme price moves beginning at 02:00 and 03:00 ET and it’s at this point that you can start to catch strong moves on five- to 60-minute setups...

Excerpted from an article originally published in the Jan/Feb 2012 issue of YourTradingEdge magazine UK. All rights reserved. © Copyright 2012, Your Media Edge Pty Ltd.
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