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E-mini Trading Tips: When To Avoid The Markets

by Lance Burkhart

E-mini trading can be a very consuming profession. The markets are open almost 24 hours a day and traders have access to moving markets at all times. The variety of instruments available for trading can make it difficult to step away from the computer and focus you energy elsewhere.

Maintaining consistent results as a trader means exploiting your edge over other participants and in e-mini trading there are times throughout the day when technical traders lose their advantage. Below we have developed a list of the best times to turn your focus away from the charts.

1. 4:15 pm EST - 2:30 AM EST

Commonly referred to as the After Hours session the period directly after the US market shuts down can be extremely slow trading. Low participation levels often means the market won't move a tick for several hours. The flipside of low volume is that important support and resistance levels where you would normally expect to see high participation can be wiped out without much of a fight. Moves that occur during this time period are best left to traders who watch and trade multiple markets.

2. 9:30 AM EST -10:00 AM EST

The opening 30 minutes is often referred to as the wildest 30 minutes of the day. When the New York Stock Exchange opens up there is a flood of market orders. The orders are initiated by non-traders and there is little concern over exact fill levels. This can mean intelligent levels that would normally hold at any other point during the day are completely blown out of the water. Step away from you station and let the market orders die out before you start to analyse the trend for the day. This will save you from getting chopped up in the early morning rush.

3. 11:30 AM EST - 1:15 EST

The middle of the day often sees a drop off in volume. Traders have identified the market move for the day and have initiated new positions throughout the morning session. By the time lunch comes around they are content to sit and wait to see what happens following the afternoon session. As volume dries up so to does price movement and without volatility it is very difficult to find profitable trades. Take an hour or so to recharge your batteries and analyse the morning session. Come back with a plan for the afternoon.

4. 3:00 PM EST - 4:00 PM EST

The final hour of trading is an extreme version of the volatility seen in the first thirty minutes. Traders look to close out their positions as the bell approaches and fills become less and less solid. Extreme price swings are not uncommon and inexperienced traders can put themselves into very problematic spots if they initiate trades during the last hour.

These time frames are very general in nature but once you start paying close attention to volume and corresponding technical levels you will notice a pattern in e-mini trading. Although the market is open almost 24 hours a day it seems as though traders have agreed upon times of when it is best to participate. Don't fight the majority, go with it and you will see an increase in your e-mini trading consistency.

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Disclosure: Long EUR/USD