So today on paper I earned about 77%. Its not about what I could have earned today however, but the question is, how sustainable is this system? Lets take a look at todays chart:

I pulled this off the QQQ 5 day chart which is what I have been using in developing this system. As a matter of fact below is a bigger picture of what I wanted to talk about today:

You can see that I made some annotations. The Bracket is what happened to QQQ in the premarket from 5am-8:30 Central Time.  Now, note what acutally happened with the corresponding letters. Letter A was the open and gap fade that happens almost everyday and has been happening as far as I know since the 90's. Orders stack up overnight and before open and the Market Maker at market open deals with this glut of buys or sells and it takes about 30-35 minutes. Some traders make thier living on fading the gap alone, thats worth looking at another time. So the letter 'A' above is 30 minutes after open and is the max swing up or down in the morning. Notation 'B' Corresponds to 12:00-12:15 Chicago Central Time. Notation 'C' corresponds to 2:00pm Chicago Time.

As you can see, the premarket seems once again to be showing an abbreviated 'sparkline' of what is going to happen that day after open all the way until close.
One thing of note is the Y axis of the premarket graph sometimes is askew, which will not allow me to predict how high or low the X axis or the price will be. The only thing it will allow me to see is if the market will open low or closed compared to the previous day, and what direction I need to bet and when.
After 2pm however, is a bit less secure and more dangerous in its speculation due to the "Y" Axis problem, which makes it hard to determin if things will climb or drop after 2pm.

One thing that I really am not seeing here is a drop at open, a gap back up, and then a horseshoe U or V dip all the way down to noon and then things going back up.Why not? I can only speculate because of computer trading number one, and number two, due to the fact that amateurs seem to trade in the morning and pros in the afternoon.

The one thing that I'm going to have to do is average all the premarket graphs together and map/grid the corresponding trading time to their respective trading days. As it is right now I know that I should get in about 35 min after market open, and the switch over time is noon and then exit is right before 2. But what if the sparkline one day comes up with an unfamiliar shape? I need to be able to 'read' it and know what time of the day which particular area of the sparkline pertains to.

The pattern is pretty strong here, and has been over the past few weeks. If I really get a handle on this this would be a big f*&king deal, to quote Joe Biden. See you in the morning, for another practice day. Use caution before you actually make trades based on this, this is brand new and is still being tested.

Tradinginsider