| One of my favorite times to trade the ES e mini is in | | | | happen every day, but it is not unusual to see this |
| the hours before the session opens. I usually start | | | | phenomenon. There are also days when the futures |
| around 6 AM CST and find more than my share of | | | | market is quite some distance from the previous |
| good trading opportunities. The market is generally | | | | day's close, and this makes for a very shaky and |
| fairly tame and that trading is usually not frenetic. | | | | unsteady opening. The day traders do not always |
| Of course, a trader needs to be very careful around | | | | agree with the overnight traders assessment of price |
| 7:30 AM CST because the Fed and Fed agencies | | | | action and sometimes outright ignore it, which sends |
| usually make their announcements at that time. | | | | the futures prices either tumbling or soaring toward |
| Whether the news is good or bad, the market | | | | the opening prices. It can be quite a melee, so I |
| usually spirals into wild gyrations, both up and down, | | | | generally avoid being in a trade as the market opens. |
| before it settles down. I have not found any rhyme | | | | One hazard of trading the early morning hours is |
| or reason to the market movement at this time as it | | | | getting yourself mentally prepared to trade. For me, |
| seems traders interpret the data individually and the | | | | it requires a stiff cup of coffee and an extra amount |
| trading reflects that individuality. On the other hand, | | | | of concentration. I have watched good trades slip |
| there are times when the market makes very large | | | | past me due to my lack of alertness. You are |
| moves in one direction, usually overshooting where | | | | essentially getting out of bed and beginning the |
| you would expect it to stop. These situations are | | | | trading process without the normal breakfast and |
| generally fairly easy to trade using a simple fade | | | | mental warm-up. Of course, you could wake up very |
| technique. | | | | early and go through your pre-trading routine, but I |
| Since the volume is not nearly as heavy in the | | | | value my hours of sleep too much to wake up at 4 |
| pre-session trading hours, you can experience a | | | | AM. |
| random blip as the odd larger order hits the market. | | | | I feel the pre-session trading is often overlooked and |
| Sometimes these blips are due to other factors, like | | | | am surprised when I tell people that I enjoy it this |
| rumors or anticipation of a report that will make the | | | | particular trading time. Most traders I mention this to |
| market move in one direction or the other. Other | | | | have never considered the idea of pre-session |
| than those two minor annoyances, the pre-session | | | | trading. They assume the pre-session trading is similar |
| hours are generally pretty smooth sailing. A trader | | | | to the overnight trading which can bore even the |
| can use his or her normal setups with great success. | | | | most patient trader to tears. |
| Trading generally slows down after 8 AM CST as the | | | | I highly recommend that you consider trading before |
| traders await the opening of the exchanges. Oddly | | | | the market opens, as you may be pleasantly |
| enough, there are many days when the market will | | | | surprised at the amount of price action and |
| move to the previous day's closing price, closing in a | | | | movement in the market. For me, it's too good to |
| gap that may have formed. This does not necessarily | | | | simply pass up. |