This article written by Øystein Nerva was originally published in the November 2011 issue of Traders' Magazine.

  • Øystein Nerva has a master degree in finance, and for the last couple of years he has been working as an equity sales trader in Oslo, Norway. In order to gain an edge for his clients he uses statistical analysis of price movements to optimize timing and to gain insight into likely future trend
  •  

Have you ever noticed the extreme volatility at the start of the trading day and how the trading range from the first 30-60 minutes of the day tend to set the bias for the rest? After reading this article you will know how to use this time zone to predict the intraday market cycle and identify where highs and lows of the day are most likely to occur.

As you can see in Figures 1 and 2, the trading day can be divided into three stages. First we have the volatile and emotional opening range (OR), followed by the boring midday doldrums (MD) and then the closing range (CR). Two of these stages or time zones have a high probability of containing extreme readings (high or the low of the day) while one has a very low probability of such readings.

 

The information in TRADERS´ is intended for educational purposes only. It is not meant to recommend, promote or in any way imply the effectiveness of any trading system, strategy or approach. Traders are advised to do their own research and testing to determine the validity of a trading idea. Trading and investing carry a high level of risk. Past performance does not guarantee future results.

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Editors’ Picks

EUR/USD up on Monday, but unable to recapture 1.0600

EUR/USD up on Monday, but unable to recapture 1.0600

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GBP/USD reverses direction, reclaims 1.2300

GBP/USD reverses direction, reclaims 1.2300

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USD/JPY consolidates around 135.00 mark, downside potential seems limited

USD/JPY consolidates around 135.00 mark, downside potential seems limited

USD/JPY gained some positive traction on Monday, though lacked any strong follow-through buying. The risk-on mood undermined the safe-haven JPY and extended support amid rising US bond yields. Upbeat US Durable Goods Orders failed to impress the USD bulls or provide any impetus to the pair.

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Editors’ Picks

AUD/USD holding above 0.6900 but not for long

AUD/USD holding above 0.6900 but not for long

The AUD/USD pair eased on Monday and trades a handful of pips above the 0.6900 mark. Investors remain cautious amid recession fears and a scarce macroeconomic calendar. Additional clues on economic growth and inflation are scheduled for later this week.

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EUR/USD up on Monday, but unable to recapture 1.0600

EUR/USD up on Monday, but unable to recapture 1.0600

Bulls are still losing the battle around the 1.0600, as EUR/USD pulled back after reaching a two-week high of 1.0614. Market players eye inflation-related figures and policymakers' words on monetary policy within the ECB Central Banking Forum.

EUR/USD News

Gold bears gearing up for a breakout

Gold bears gearing up for a breakout

XAUUSD is slowly gaining bearish traction, with sellers now aligned at lower levels. Gold advanced throughout the first half of the day, but trimmed gains and trades near a daily low of $1,820.63, as the dollar gathered momentum ahead of the US opening. 

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Terra’s LUNA price finally shows the buy signal you’ve been waiting for

Terra’s LUNA price finally shows the buy signal you’ve been waiting for

Terra’s LUNA price shows optimism to start the final week of June. The potential for a new bull run is beginning to materialize. LUNA price sees an uptick in social media commentary.
 

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