First off, congrats again to Jeffrey A for his Trend HiJacking contribution. The manual was so well done that there was little to add at the Saturday seminar. I can’t wait for the other 3 chapters!
Of all the information, I was most impressed with his original application of EOT_TA to spot a continuing trend (> 80), and then (unlike most indicators) you are given a chance to ride it to the end.
Thus the question, at what periods during the day, can we most expect these extended EOT_TA's to appear. Jeff stated first and last periods of the trading day, and I wanted something more precise. I was also curious about how long these segments can be expected to last.
So I researched the last 25 trading days for ES and 31 days for ER2, looking for those hourly periods of the day where I spotted a greater number of 15 min or longer periods. In retrospect, for you statistics mavens, this may not be a great enough universe from which one can draw conclusions. However, you are welcome to extend this tedious, time-consuming research until you reach your idea of statistical nirvana.
Amongst the conclusions I drew were:
1. ES: The highest probability (65% of the trading day) of a continuing trend (EOT_TA > 80) will likely occur:
a. From
9:30
to
11:00 AM
Eastern, and from
2:00
to
4:00 PM
Eastern. The lowest probability will be from
11:00 AM
to 2:00 PM Eastern (about 30%).
b. On any day of the week, and possibly with little effect by news, including FOMC.
2. ER2: The highest probability (54% of the trading day) of a continuing trend (EOT >80) will likely occur:
a. From
9:30
to 12
noon
Eastern, and from
3:00
to 4:00 PM Eastern. The lowest probability will be from
12 noon
to
3:00 PM
Eastern (however, still over 40%).
b. On any day of the week, and possibly with little effect by news, including FOMC.
THE LESSON: For maximum action, perhaps at 11:00 AM Eastern, the chat room might want to be turning our
attention away from ES to ER2 until 12 noon Eastern. Then back to ES at
2:00 to 4:00
Eastern, and to ER2
from
3:00
to 4:00 PM Eastern.
3. These larger EOT_TA segments (>14 minutes) occur on the average only about 25% of the trading day for ES and ER2. This allows us plenty of time for other systems, while we wait for EOT_TA to setup.
4. Expect to see these EOT_TA larger segments dominate during the first half hour of trading: 84% of the time for ES and 74% of the time for ER2. During the first half hour these periods are consistently longer for ES (20-30 minutes) than for ER (15 - 20 minutes). Also watch for them to extend from the previous day's closing.
5. About 10% of the time, expect these EOT_TA periods to extend from 45 minutes to beyond 60 minutes, without a breakdown below the 80 line.
6. Days of the week don’t seem to matter re these EOT_TA periods. Fridays, Mondays, FOMC: they exhibit no unusual occurrences. In fact, Friday appears to be one of the most prolific days.
Since I paid no attention to those EOT_TA segments under 15 minutes, and only analyzed the long term charts, I have nothing to comment about these shorter segments, except to say that these segments can "kill" you, entered incorrectly. Thus its very important to recognize that you enter using Jeff's rules, paying close attention to his most used chart, the short term chart, before entering.
In summary, my research increases my respect for this system, and provides us with some useful probability information to increase our chances of success, allowing the "trend to further be our friend."
If I am not mistaken, all EOT_TA videos thus far have dealt with this indicator as only an exit device. I would like to request that Glen do a video on this indicator and EOT_ID aimed toward Jeff's primary use.
BobH
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