63.45%. 30.27%. 6.84%. If anybody knows what those three numbers are just from seeing the figures, you are a savant and frankly, I find you scary! But we’ll get back to that in a second. I stress the importance of making sure that if you want sustained success in the day trading business, you must be here consistently and have thorough preparation and confidence. You must also know when to trade and when not to trade. So, let’s circle back to those numbers. 63.45% is the percentage of my trading income in calendar year 2009 year-to-date that I earned occurred between the hours of 6AM ET-9:50AM ET and after the 4PM ET close. And 30.27%? That number is the percentage of my trading income in calendar year 2009 year-to-date that I have earned between the hours of 9:30AM ET- 9:50AM ET. Wait? Did I say ‘hours?’ I meant “most important 20 minute time block of the trading day for me.” 6.84%? That is the percentage of my income I’ve earned this year after the 4PM ET NYSE close. I did a double take when I realized these stats- about seven years ago. Year-in, year-out, somewhere between 25%-35% of my annual trading income comes between 9:30AM and 9:50AM and somewhere between 50%-70% of my income occurs in the pre-hours and that 20 minute time block, i.e. by 9:50AM and after the close. I don’t know how better to stress the importance of being ready for the day and active early as well as not walking out the door at 4:01PM ET other than by displaying those raw numbers. There are a few conclusions to draw here. First, leaving immediately after the close day-in, day-out typically dooms most electronic day traders. Besides earning a chunk of income after-hours, I prepare for the next day by studying what is going on. Second, by being here early in the morning, I take what I learned the night before combined with the news flow and begin to actively trade. But the third point is the point I want to focus upon for now. The 20 minutes after the open are the most important part of the day for most electronic day traders. Let me reiterate: the 20 minutes after the open are the most important part of the day for most electronic day traders. If you’re experienced in trading but not so much electronic day trading and/or you’re inexperienced in general, you may have been trained not to trade the open. That is sheer nonsense in this game. What happens is that the market quiets down rapidly (certainly these days) so you don’t get many opportunities to make a living. Thus, it is imperative to take the research you learned from staying a little after-hours along with the work you did that morning and get busy immediately when prices are the most fluid. It is comforting psychologically to know that on average, 58% or so of my income is earned by 9:50AM; by being ahead on the day, it allows me to properly be patient and trade the increasingly limited opportunities as the trading session progresses without pressing. For relatively new people, to ease back and do nothing sets you back immediately. I wholeheartedly feel like you should be trading tiny just to learn it during that 9:30-9:50AM timeframe, but at a minimum, you should be paper trading intensely rather than taking it easy. Thus, be well aware that as long as you’re well-prepared, the periods before-hours and just after the NYSE open will potentially be quite lucrative with the after-hours providing an extra boon and giving you a leg up in being ready for the next morning.
Reiterating-
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.
If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
NWS- good earnings
AFL- good earnings
MYGN- great earnings
SOLR- good earnings
NETL- great earnings
IRF- good earnings
ACE- good earnings
APKT- great earnings
FISV- good earnings
PXD- decent earnings
JDSU- decent earnings
EMR- closed near a high after posting great earnings
TUP- closed near a high after posting great earnings
APC- closed near a high after posting earnings
BUCY- closed near a high
IVAC- good earnings
BGP- skyrocketed after investment manager Bill Ackman said on “Fast Money” that she sees a low probability of the company going bankrupt
MHO- closed near a high
GS, JPM, URS- mentioned on “Mad Money” last night
CMCSA- decent earnings
ROP- decent earnings
TMO- decent earnings
DDSS- received FDA approval for Oleptro
Bad-The following stocks have bad news and/or a weak technical pattern
PNC- coming out of TARP, but issuing stock and debt to do so
CHRW- terrible earnings
CTRP- terrible earnings
ADS- terrible earnings
MET- poor earnings
KNXA- bad earnings
SEED- poor earnings
VRSN- poor earnings
MIL- poor earnings
RVBD- bad earnings
TSO- bad earnings and eliminating dividend
UNM- poor earnings
TRMB- poor earnings
DST- closed near a low after posting terrible earnings
AMSC- closed near a low after posting terrible earnings
BPZ- offering $140 million of notes
PFE- missed earnings slightly
WWW- poor earnings
R- bad earnings
Earnings:
WED FEB 3 BEFORE
ARW BDK CMCSA
HNT HW IP
ITT LAZ NOV
PFE R RL
ROP SLAB TMO
TWX WU
WED FEB 3 AFTER
AFFX AIZ AKAM
AMP ATW AVB
BRCM CBG CELL
CNQR CSCO DLB
EFX EQR FBN
FNF KIM MWW
NVLS ONNN REG
THQI V WFR
WLT YUM
Good luck today.
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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