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I can't comment statistically, however the lunch period is a tricky time for
trading. On strongly trending days with very strong breadth like yesterday,
it can be a good time to enter or re-enter the trend but requires care.
Yesterday, I entered long at 120550 around 1125 Chicago time only after two
secondary lows had been completed so I could set a stop without concerning
myself with the gap. On days which are not so strongly trending, I generally
avoid trading during lunch unless I find a unique opportunity to enter at
very strong support or resistance areas. I have also noted a tendency for
moves to start a half hour "early" around 1130 ... often these moves are
simply false runs which are quickly reversed, but there are times when it is
the start of something important ... thus the need to judge proximity to
important s/r when the move begins.
Not sure what you meant by falling back into the previous oscillation range,
but I had clear targets in 1220-23 area and price obviously stalled a few
points underneath. I simply began tightening my stop as the close approached
which got me out with 10 handles ... not what I wanted but a nice run. All
things considered, a 5 handle net move above such a long and tight range
might be called a false breakout if one were buying highs but a nice
opportunity if one were buying closer to the lows.
Earl
----- Original Message -----
From: "Steve" <gts@xxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, July 13, 2001 6:16 AM
Subject: [RT] False Breakouts
Yesterday the S&P broke out of it range around lunch time somewhere around
$1209, but then was sold hard back to it previous oscillation range.
My question is this:
Statistically speaking, do more HOD breakouts in the lunch Deadzone fail
than when the pits are full?
Anyone care to comment?
Steve
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