Here ’s a pretty important chapter…time frames intraday…I use these time frames to gauge how far I want to hold my positions…these are pretty important so read carefully..
The obvious time frame is of importance. Again the stock you bought could be at the very peak at 9:30AM. Intraday highs are set right at the open, and if you see a large fade, try to grab the profit ASAP if you have it. Typically if it’s 1% (or 2% on margin) by 9:30-9:32AM ET I’d grab it if I begin to see the slightest fade from the highs.
10:00AM “Big Guy Buy Time”
If a stock you bought survived the 9:30-9:59AM and is right at the highs set in that frame, there’s a good chance it’ll sustain past 11:00AM and into 1:00PM ET. I’d say 60/40 if this occurs. The big buying can occur at this time, and economic reports are released right at this time. It can get dramatic right at 10:00AM ET.
￼10:30AM “Wavegenius sell time”
If I’ve held from the previous day up to 10:30AM and the stock is at the high, I sell right at 10:30AM and wait for a new setup. Why 10:30AM? Stocks can survive a sell off up to 10:30AM MAX typically. The very peak occurs frequently at 10:30AM, and I usually like to sell right at this time. If it’s survived 9:30-10:30, I’m out.
1 PM-2:30PM “Big Guy Sell Time”
I’m sure you already know about this time frame, but it seems like 7 times out of 10 the big guys start the big selling programs at this time. It could be because they want to go to lunch, have meetings or whatever, but for some bizarre reason it just seems to happen frequently. If I’ve held into 12:59PM, I’d sell right before 1:00PM hits. If the market or stock you own can survive this time frame, you could be sitting pretty into…
3:05 PM “Big Guy Decision Time”
This is when I usually buy. Not at 3:00PM but 3:05. It just seems to work in the all the years I’ve been trading. 3:00PM the big guys could un- leash a fury on the market with major sell or buy programs, I usually wait until the last second like I would on EBay when I’m bidding on some- thing I want. I want the stock, but only if it closes at the highs in this time frame
UPDATE 2013: NEW TIME FRAME –
￼3:35PM can also be very important these days, because big bullish ral- lies have evaporated on the “big dumb guy with a lot of money” lurking in the shadows…keep in mind that this one period from 3:35-4PM can provide THE MOST volatile wave patterns in such a small time frame. I’ve seen 10-20 S&P fades from this period and placing strategic stops near .618 to contain your profit or minimize losses is key.
Here’s a biggie time frame to note: FED MEETINGS.
Trading Fed Meetings
I know people who ONLY trade during fed meetings and the rate an- nouncement reaction. It could be highly profitable, yes, but if you’re wrong it could be dramatic. The move can be huge. What happens be- tween 2:15-3:05PM after the rate move is announced is pure insanity.
The indices are VERY wild during this fifty-minute period, and it’s not a good idea to jump in during this specific time frame. My strategy is to wait until exactly 3:06PM ET when the waves settle down. If the indices are trading at the highs, it would setup an upward Wave 3, and I’d golong.
But if at 3:06PM ET it’s trading near the lows, I would avoid the mar- ket altogether. Typically everything settles down by that time, but I feel more comfortable trading long side only. If a fed meeting reaction is to the upside and it’s off a 3rd wave pattern break, it could potentially be a powerful and high percentage trade.
￼Also something big to note…is knowing the seasonal monthly patterns every year…it’s not an exact science, but strangely enough it works very frequently…here are the best and worst months to trade:
Monthly Time Frames
Important Seasonal Time Frame – October to April
The strongest time of the year starts in the middle of October and ends around April to May. It’s been proven historically that the market outper- forms the May to September time frame. It’s “sell in May and go away.”
My worst trading months have been in the summer in the past decade and my best trading months the winter. Typically a large percentage of my gains have come in October to December. Why? If the market is “up” for the year in
October, there’s an upward bias as a result of “window dressing.”
The big funds want to show a great performance for at least that quar- ter and will buy the best stocks, typically tech leaders, to pump their port- folios and show their clients that they’ve been holding the leaders, and the appearance that it was for the entire year. The leaders can REALLY move big time in this time period, and even buying dips can prove to be profitable.
The Best Months Of The Year
The best time to trade, if you’re going to pick a couple months during the year is middle of October, November and December. Again, the window￼dressing phenomenon helps boost stocks in this period, if the market was up for the year headed into October.
My huge QCOM trades in 1999, for example, were buoyed by the window dressing effect, and trading during this period can be almost mindless. There are times when you could simply wait until earnings come out in October, and pick the best stocks with the best earnings during that month, and hold until Jan of next year.
The Worst Months Of The Year
August, September and the beginning of October are bad. 9/11 occurred during September, the crash of 1987 in September-October, the crash of 1929, September 2008…the closing of the books by the big funds occur in these months
My Worst Month Of The Year..only for the big momentum names… January. The most dreaded month for me. Most of my biggest losses have occurred in January and NOT in August, September and October.
Why? Because of tax selling. The leaders are pushed heavily into the last day of December, and when the first day of the New Year arrives, it’s sell-sell-sell the leaders. They’ve pushed them as far asthey can go, and will sell in January simply because “they” don’t want to pay taxes for the previous year in that year. I’ve seen rallies last into the middle of January, and when the earnings come out, it’s sell-sell-sell on the earnings results regardless of how good the reports might be