Stocks & Commodities V. 31:6 (20–24): Early Morning Activity by Anthony Trongone
Product Description
Early Morning Activity by Anthony Trongone
Let The Trades Begin
Early Morning Activity
Can an analysis of early morning trading activity offer you a forecasting advantage in the opening hour of the equities market? Find out here.
When trading the spiders (SPDR S&P 500 ETF Trust) in the opening hour of the regular trading session (9:30–10:30 am ET), many daytraders overlook early morning trading volume as a forecasting indicator. Yet trading activity during the 7:30–8:30 am hour appears to have a strong impact on the direction of equities.
The early hours
I looked into this further and studied data from November 8, 2010, when the spiders (SPY) were at $122.37 (7:30 am) and reached a closing price of $156.24 (10:30 am) at the conclusion of this study on March 31, 2013. This spectacular run of $33.87 was impressive but the focus of my study was on trading from 9:30–10:30 am. In this opening hour, the summary performance of the spiders was $6.42 in these 600 trading days. If, however, you use early morning (7:30–8:30) trading volume as an indicator, can this performance be improved?
Before entering a trading position during the early morning hour, it’s a good policy to contrast its pricing volatility with the daily trading range (highest–lowest daily price) of $1.497. In comparison, its hourly average was $0.786. Given this disparity, you can expect wide price swings in this opening hour to deliver either strong gains or inflict massive damage.
Let The Trades Begin
Early Morning Activity
Can an analysis of early morning trading activity offer you a forecasting advantage in the opening hour of the equities market? Find out here.
When trading the spiders (SPDR S&P 500 ETF Trust) in the opening hour of the regular trading session (9:30–10:30 am ET), many daytraders overlook early morning trading volume as a forecasting indicator. Yet trading activity during the 7:30–8:30 am hour appears to have a strong impact on the direction of equities.
The early hours
I looked into this further and studied data from November 8, 2010, when the spiders (SPY) were at $122.37 (7:30 am) and reached a closing price of $156.24 (10:30 am) at the conclusion of this study on March 31, 2013. This spectacular run of $33.87 was impressive but the focus of my study was on trading from 9:30–10:30 am. In this opening hour, the summary performance of the spiders was $6.42 in these 600 trading days. If, however, you use early morning (7:30–8:30) trading volume as an indicator, can this performance be improved?
Before entering a trading position during the early morning hour, it’s a good policy to contrast its pricing volatility with the daily trading range (highest–lowest daily price) of $1.497. In comparison, its hourly average was $0.786. Given this disparity, you can expect wide price swings in this opening hour to deliver either strong gains or inflict massive damage.
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