If the title sounds a little confusing, it was meant to. The issue to be discussed today, is not just ‘when’ to trade. There are trades that can be done any time the market is trading. That does not mean that you should be trading all day long, it just means that the times you pick to trade can be any time, IF you know what to trade. That is the point of this article.

That was the opening paragraph the last two weeks, in part one and two of this three part series. Last week we looked at the key morning reversal times, and began to discuss lunch. Today we will discuss lunch, and the afternoon reversals.

Lunch: Lunch can be a little tricky to pin point on some days. At its broadest moments, lunch begins after the 11:15 reversal time (remember, all times are ET, market time) ends its move, and can last all the way until the 2:15 reversal time. This is what typically happens on sloppy, non-trending days. On nice trending days, lunch may be as short as 12:00 until the 1:30 reversal time. The most precise reversal times over the lunch period are 1:30, and 2:15 (2:15-2:30 range on most days). Below is a typical ‘trending’ day.

Notice a few things, and then look at the charts yourself. These revelations will save you, and make you money, everyday.

1. Note the range (the fluctuations from the highs to the lows), or volatility, before lunch, after lunch, and during lunch. Note again, from last week, the power of the 10:00 and 10:30 reversals

2. Note the volume during lunch.

3. Note the last playable event was at 11:30, and the next one was at 1:30.

4. Note the narrow bodies and tails during lunch, you don’t see the rest of the day.

These are the reasons traders get frustrated at lunch, real moves rarely happen.

And After Lunch: After 1:30 comes the 2:15 time. If 1:30 does not begin the afternoon move, then 2:15 will. If 1:30 does produce a big move, then 2:15 is often the target. The last big time of the day is 3:00, when the bond market closes. A minor reversal time is 3:30, and often a good time to end trading for the day, as the last 30 minutes is often sloppy. Here is one more chart.

Here we see another typical day. You will find, when you study this, there are only a small handful of patterns that happen over and over again. Here we have 11:15 breaking out over a red bar and starting a rally. It continues into lunch. Smart traders know, if scalping, to stand aside as soon as the rally weakens. Notice the ‘breakout’ at lunch was time to ‘sell’, not to buy. Traders who bought their lost, and traders who held from 11:15 gave back all of their winnings by 1:30 reversal time. The 1:30 kicks off a rally that takes the market back to the high of the day, which stalls right at the 2:15 reversal time. This reversal time and resistance area causes a sell off, and the 3.00 reversal time kicks in for one more rally.