One of the growing trends that we have seen in the market of late is the heavy program buying happening anywhere in the last hour of the trading day, but most often it occurs sometime in the last 15 minutes and to the upside. Given, the last hour is traditionally a volatile time in the market as it is normal to see an increased amount of trading heading into the close, but of late, the volume has been moving price substantially and even reversing trends on a dime.
The most noticable program buying has been in tech, but nonetheless, can be seen broadbased and across the entire market. So if you are short (and if you subscribe to our FREE member’s section you probably have been quite a bit with our day-trades), then it is paramount that you show caution towards this prevailing tendency in the market. Whether you are long or short, be sure to have a tight stop-loss heading into the close so that you may protect your gains.
One method that is easy and worth doing, is using a shorter time-frame on your candle charts. Instead of using 15 or 30 minute candles to determine your stop-loss, in the last hour, work with 5 or 10 minute candles if you normally use 15, and 15 minute candles if you typically use 30 minute candles. Either way, shorter time frames than your norm is essential in the final hour.
Happy Trading Everyone!