The Dow Jones Wakes Up Method - Aussie Stock Forums

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  1. #1

    Join Date
    Sep 2007

    Default The Dow Jones Wakes Up Method

    Alright guys, here's another method to put forward.

    Been looking at the DJ and have noticed something interesting that others may have noticed before, but I just want to put it out here for comments and suggestions.

    It seems that the DJ doesn't do much during the hours of 22:00GMT to 8:00GMT... ie, shortly after it closes until the time the European market opens the next day.

    However, when the European market opens, there's a large movement on the Index and most of the time, it breaks out from the quiet period.

    Attached chart of a typical DJ highlighting the period where not much happens.

    How to trade this?

    Draw a box around 22:00 - 8:00GMT with the horizontal lines bounding the period's highs and lows

    Watch the next hour or two and see which way it breaks.

    Trade in the direction of the break.

    Stop Loss at the other end of the range.

    An alternative way to take advantage of this.

    About 5 minutes before the European markets opens, create two stop orders. One about 10pts higher than the highest in the last 5 minutes and one 10pts lower than the lowest low. Then wait for it to hit those levels and enter the trade.

    So what do you think? Potential?
    Attached Images

  2. #2

    Default Re: The Dow Jones Wakes Up Method

    The quite periods after the DIJA closes are indeed quiet but the open is usually very choppy. Its invisible on the 1hrs charts but Dija open whipsaws like hell. A 10pt stop will get crushed in no time. Tried trading dija gaps a while ago with limited success due to the long tails. The method looks ok for these few days as its been trending heavily, but what about range bound days, also what levels do you exit the trade?
    I believe effort to be a finite resource. Something to be used only when there are no other options available.

  3. #3
    CanOz's Avatar
    Join Date
    Jul 2006
    Sunny Brisbane
    Blog Entries

    Default Re: The Dow Jones Wakes Up Method

    Quote Originally Posted by skyQuake View Post
    also what levels do you exit the trade?
    Hmmm, i'm curious too. The entry's can be random, but exits will make or break you right?


    "Dump everything aggressively. Take the price to a place where it trades" - Michael Platt - Hedge Fund Market Wizards

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