What is the 11am Rule in Trading

Experts have made observations on Candlestick chart patterns and evolved with a new dimension of analysis for stocks based on certain parameters. Keeping in view those, experts have defined a 11:00 am rule in trading. 

In short, it was confirmed that after attaining a new high between 11:15 am and 11:30 am, EST.

Then, it is a probable fact of 75% to have the trending stock to close within 1% of the High of the Day (HOD). 

Likewise, a stock after attaining a new low between 11:15 – 11:30 am EST, there is 75% probability of closing within 1% of the Low of the Day, (LOD). 

Conditions Defining the 11:00 am Rule:

Several stocks differ from the 11:00 am rule, and experts have back-tested before ascertaining the 11:00 am rule. 

The stock that is subjected to this rule must have a daily volume more than 2 million and the stock must belong to mega capital and hold a liquid options chain.  

Note: A series of back tests on the $SPY/$SPX have been provided to be effective on the 11:00 am rule, hence you are advised to follow only stocks that relate to the mentioned ones.  

Remember, the indicator seems to be perfect, it may not be suitable in all scenarios. 

Indicator Tools Performance:

You will be able to identify the high of day, low of day zone on a regular daily session between 09:30 am and 11:30 am EST. 

In the illustrated example below you will find the range taken between 09:30 am and 11:30 am and furthermore, the user can make a selection of cut off time @11:00 am, setting. 

By applying the moving averages, you may find the stock breaks above the HOD, and the ADX representing a strong momentum to the upward direction, then in the chart, you can find candlestick graphs progressive with neon color. 

If the trend is continuous, representing a bullish movement, then the indicator shows arrows under the formed candles that figures you to continue with the trade signals. 

A similar fact shall apply if the stock breaks below LOD, and colors shall differ to show a downtrend representation. 

The candlestick may develop a trendset and is represented by a cloud. 

The cloud can refer to trail stop or long (re entry point) as mentioned in the chart below. 

Trade Indicators Confirming the Three Scenarios: 

In case the stock breaks out above the High of the Day Zone, then you can find the development of the uptrend.

Likewise, for a stock breaking out below the low of the day zone then you can observe the development of the downtrend. 

While the trading is in progress, the candlestick chart may represent price action to be in a range then LOD/HOD can be identifiable to demand/supply.