My alarm goes off and I hit snooze for 30 minutes, yet I'm never really asleep, just lazy and milking every second I have in bed. You want honesty, you got it!
The "cash market" opens. While futures are traded round the clock, the majority of the action comes during RTH (regular trading hours) when the NYSE and NASDAQ markets are open for trading. These hours are 6:30am - 1:00pm Pacific time. The first 30 minutes are a feeding frenzy. Hundreds of thousands of contracts are traded and price exploration is intense. This is typically the highest probability time to trade and I take advantage when opportunities arise.
6:30am - 11:15am
I trade. What else can I say here? The agriculture markets open at 7:30 Pacific time and close at 11:15am and since I enjoy trading these markets quite a bit, this is when the majority of the action for me takes place.
11:15am - 12pm
I watch. The East Coast gang tends to take a break during the middle of the session which slows the movement down and reduces the volume, which tends to leads to erratic and unpredictable markets. If a perfect trade setup shows up, I'll take it, but this is definitely not the best time to trade.The ag markets are closed so now it's just oil, the indicies (DJIA, S&P 500, NASDAQ), currency and the bond markets that are open.
The final hour of the day ramps back up as people tend to unwind their positions or stock up for the rest of the week, so the activity gets a little crazy and the volume spikes leading into the closing bell. If quality trading opportunities arise I take them though I don't force the issue as this is not the best time of day to trade. At 1pm I'm all done trading, if I haven't stopped already.
1pm - 5pm
I recap the activity in each market and log certain stats such as volume, range and signals generated. I then get a feel for each market and what the following day has in store by evaluating the possible news and events that will move the various markets. If I'm waiting for swing trades to setup that will be held for days on end, an entry signal may have been generated and if so I will need to prepare to execute the trade at the beginning of the session the following day or when the next session starts in the later afternoon.
Time moves pretty fast when you're trading though the mid-day doldrums can be really boring. The nice thing is that I trade so many markets and various contracts that if it's slow in one market another one is bound to be working. Grains slow and there's a bunch of news affecting the strength of the dollar? Trade oil. Indicies flat as a pancake and oil sucks but the crop report came out an hour ago? Go trade the grains.
I use a dual-core Dell 9200 with dual 20" monitors. It's sole purpose is for trading as I perform all my other tasks on my iMac. It is attached to a UPS battery backup in the event of a power failure and in the near future I hope to add a 2nd broadband Internet connection as a backup in case the first goes down; with no power and no Internet connection, I am dead in the water and if I happen to be in a trade when either event occurs I could potentially lose a bunch of money. Here's what my trading computer looks like:
The monitor on the left (what you see above, click to enlarge) displays my charting software MultiCharts, which is running an indicator called LOGIC which was developed by my mentor William Schamp. It's utterly brilliant and discussing the indicator/system would take several posts, which I'll get to later. I watch this screen all day and click through the tabs on the bottom to see various markets and time frames as I hunt down perfect trades. This screen is showing the grain markets: corn (gold), soybeans (green) and wheat (purple). If you can make it out, each individual bar on each of these charts represents 49 contracts traded, the top of the bar being the highest price traded the bottom being the lowest price traded during 49 contracts. During the slow times, these bars are drawn slowly...during crazy busy times in the market these bars will be drawn in less than a second.
The monitor on the right (screenshot above, click to enlarge) is connected to my broker. This is where I execute all my trades. What you see is called a DOM (depth of market) or a price ladder. The one on the left is for the ES (S&P 500 eMini) and the one on the right is for the YM (mini-Dow Jones Industrial Average); you can see the contract symbols at the top of each window (remember Monday's lesson). I have tabs at the bottom of this screen that have DOM's for every contract I trade so I don't have to type each symbol in, which is a total PITA. In the center of the red and blue columns is the price. The highlighted areas you see are the depth of market, which shows how many contracts are cued up to be bought or sold at the associated price; the exchanges only feed me the 10 inside bids and asks...some traders would kill to find out the depth of market further than 10 out...I don't really care. The yellow bar in the middle is the last transaction, which bounces between the "bid" and the "ask" which are the people wanting to buy and sell, respectively. The window in the middle of the screen is called a "time and sales" window which gives me a visual indicator of the transactions that are going through, in this case for the ES. Red are sell orders that were filled, green are buy orders that were filled and the # indicates how many contracts were filled with each order. I filter this window to only show orders of 10 contracts or more as anything less is small fries retail traders (like myself) and I really only care to see what the REAL money is doing. Check out the video below that shows you what this screen looks like at the end of a day when there is a frenzy of buying and selling.
So, that's it. It may seem boring and simple but that's the way I like it; the way I need it. It's extremely important to have a regimen you follow religiously and have your trading environment memorized like the back of your hand because it increases your ability to execute when the market starts getting out of control and the desire to panic sets in.