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Why You Should Trade the First Hour

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Statistics tell us that the great majority of the time, one end of the daily price range of the S&P 500 occurs within the first hour of trading! Consequently, if we can place a winning trade in the first hour of trading, we'll have terrific trade placement. If one of those 2000+ point trending days occurs, we'll have a big payday.

On days that persistently trend 1200+ points, it's critical to get aboard the move early. Why? Well, after the market has trended 800+ points, most traders are anticipating the reversal and are very reluctant to go with the trend.

By trading the first hour, I usually do not mean the first 25 minutes or so; this period's bid-ask spread (also known as the opening bulge and amateur hour) is too great and price frequently reverses around the 9:00 Central Time Cycle Timing point. We should therefore usually not enter before 9:00. Sometimes, there may be compelling reasons to enter earlier but this is usually a mistake.


By Charles Holt,
Daytrader's Bulletin
http://www.daytradersbulletin.com
Real-time Trade Signals for S&P 500 & Nasdaq 100









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