Alchemy Intraday Time Zones indicator alerts you to the various
widely recognized trading time zones during the market day.
This indicator is an excellent tool for the daytrader.
many markets such as the S&P futures, Nasdaq futures and other
daytraded markets, it has been discovered that there are distinct,
repeatable patterns in the market relating to certain times
of the day. For instance, many daytraders will not enter trades
in the first 20-30 minutes of the market due to increased
volatility and lack of a clear trend development.
is important to note that these times are “expected” time
patterns and are not to be construed as a stand-alone trading
system or as being 100% accurate. However, the time zones
are accurate and consistent enough to assist the daytrader
in determining “expected” reactions in the market in the time
zones. Opening Session You will notice that the first 20 minutes
of the market day are not included in the
is because most daytraders do not trade this period due to
the extreme volatility and lack of trend development during
this time. Many of the NYSE stocks are delayed in opening
in the morning due to order imbalances and this takes a few
minutes to resolve itself.
Opening Session will many times set the tone for the rest
of the trading day. If there is a large move in the Opening
Session without any significant retracement in and around
the end of the Opening Session, expect the likelihood of a
strong trending day in that established direction. Normally,
the market will put in a counter-trend move of the established
trend in and around the end of the Opening Session. The use
of other technical indicators such as the Trading Alchemy
Divergence Indicator or possibly other indicators such as
stochastics, MACD or moving average crossover indicators are
used to help identify possible counter-trend moves.
Mid-Day Period is usually the least volatile time of the trading
day. It is during this time of the day that many of the floor
traders in the trading pits take a lunch break and actually
leave the trading pits. This usually creates light volume,
which in turn can cause exaggerated, choppy movements in price.
When volume dries up, it allows the smaller floor traders
a chance to run and gun for stops without having to commit
large amounts of capital. Many times, well-placed stops can
be hit during this period due to the lighter volume conditions.
Many traders will not enter short-term or daytrades during
this period. Even if the market is in a strong trend coming
out of the Opening Session, the Mid-Day Period will usually
be less volatile than other times of the day. Many traders
prefer to monitor their positions or try to range trade during
this time. The use of other indicators to help identify short-term
highs and lows could be used to attempt range trading during
the Mid-Day Period.
market at this time is expected to resume its trend for the
day, or if there is a particular bullish or bearish bias for
the day, move in the direction of the high or low set earlier
in the day. The market is expected to test it’s high or low
made earlier before the quieter lunch period. Many traders
enter their afternoon trades during the Resumption Period.
times, the Afternoon Activity occurs when the market attempts
to relieve the buying or selling pressure built up throughout
the day by moving counter to the established trend of the
day. The market will many times test the high or low established
earlier in the trading day at this time. Traders can watch
for signs of a possible reversal or continuation of trend
and enter their trades accordingly.
the market does not move counter to the established trend
during the Afternoon Activity, then watch for the move to
occur during the Late Afternoon Activity. If the counter trend
move occurs during the Late Afternoon Activity, the move should
be much stronger.
the Alchemy Intraday Time Zones are not intended to be a trading
system. These time zones have been recognized to be fairly
consistent in the more liquid daytraded markets. This indicator’s
purpose is to assist you in identifying the times when certain
market events regularly occur. Use the Alchemy Intraday Time
Zones indicator with other indicators to suit your own style