http://www.tradingmarkets.com/.site/Daytrading/Commentary/wmgame/02272006-49692.cfm
"Having read Mark Fisher's book "The Logical Trader", I wanted to see the odds of the market making its daily high or low during the first and last hour of trade. The results were interesting. I found that the daily high occurred during the first or last hour three-quarters of the time. The daily low occurred during the first or last hour approximately 60% of the time. Equally interesting, the midday hours only saw daily highs or lows approximately 10% of the time, although they accounted for one-third of time in the market."
Last hour sometimes referred to as "smart money"
http://traderfeed.blogspot.com/2007/06/stock-market-performance-by-hour-of-day.html (stock mkt performance by hour)
The final component is the Dow's performance during the last hour of trading. Rennie Yang of Market Tells notes that this has been weak of late, which he interprets as caution on the part of the smart money. We can see that the last hour has underperformed over the last two years. About a quarter of the Dow's overall gain since 2004 is attributable to the last hour of trading; since 2005, however, the Dow's last hour has actually lost money.
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2 comments:
i am thrilled that you are reading Dr. Bretts site, what a powerful resource! I remember reading the article you quote, i love trading the last hour more than the first because you have more data to base decisions on, but the lunch 2 hours are usually the worse, except for trend days. Do a search on his blog for Brief therapy. That will help in all sorts of ways. Let me know how you enjoy his site. I cant wait for his new book, it will have electronic links that will be updated, and he is going to share some of how he manipulates data via excel and his data supplier to configure his proprietary charts of money flow, accumulated tick etc. Does the SDS trade all night, and are your stops active in the night session?
One thing to be long first hour you pretty much need to be long at end of previous day.....because of GAP UPS.
D
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