Normal Trading Hours moved: 9am to 9:15am

[mave_rick]

From 18th Octiber, normal trading hours has been moved from 9am to 9:15am. First 15 minutes, i.e, 9am to 9:15am will be used for open price discovery. This will be called Pre-open session. The NSE weblink contains the details about the open price session.

http://www.nseindia.com/content/press/PreOpen-October2010.pdf

 

[murthymsr]

From 18th Octiber, normal trading hours has been moved from 9am to 9:15am. First 15 minutes, i.e, 9am to 9:15am will be used for open price discovery. This will be called Pre-open session. The NSE weblink contains the details about the open price session.

http://www.nseindia.com/content/press/PreOpen-October2010.pdf

As per my understanding:

At present opening price is the first trade of the day.

In future, opening price is the 'average' price of the first few minute transactions; This is similar to what the closing price already is.

Presently, quite often, the open price (based on the first trade) is the highest or the lowest of the day and all other trades are far away from this one. This may be because of some over smart with vested interests.

In such cases, the open price and also the high or the low price is erroneous and does not really reflect the trend in the TA. Indicators like stochastics, which depend on high and low values are likely to give wrong signals.

Hope, with the changed system, the open, high as well as low prices will be more dependable.

Regards.

 

[mave_rick]

Totally agree with that.

But my concern is about the chart. How the 1 hour chart will behave in the scenario. Will it from 9-10am hourly chart or will it be 9:15am-10am hourly chart. Based on that do i need to modify any of trading strategies? Probably have to wait for some days to know how it works.

:eat: Happy Weekend

 

[murthymsr]

If price discovery (open) was perfect, the open will not be equal to high and open will not be equal to Low. (abnormal open)

While yesterday there were 9 cases with abnormal open, today there is only one (LT on NSE). I do now know about BSE. Are people maturing to place proper orders in pre-open period? Time only will tell.

May be some special techniques have to be developed to trade during those initial period. This is a very risky proposition, but risks and regards go together.

And further, when all the risks are removed ( assuming that the pre-open session meets it's objective), the remaining session session is less volatile.

Considering these to aspects,

1) Gap up/down trading techniques will fade away.

2) The day's market remains choppy and cyclic TA indicators will find more utility.

3) Intra-day trading as a whole, becomes less rewarding.

4) Some Intraday traders may shift to Futures trading.

These are just hypothetical musings and other members may also share their opinions.

Regards.

murthymsr