This is a strategy you can use day in and day out as a setup to determine where price is going to trend / channel. This is a forecast method that works for the ES (E-Mini) and other futures / currencies. As mentioned, you can use it without any software, as it’s a powerful way of looking at your charts by observing price action.
The goal of the ABC is to split the trading day into three separate parts: the opening (A), mid (B) and end (C) sections. The ES opens at 9:30 a.m. US/Eastern so this is the position of the first line. The second line, placed at 12:00 (noon) is the second line. This effectively encompasses the A part of the day (2.5 hours). What can be expected out of this period? Generally, a strong movement or direction as influenced by systems and swing traders. The second part of the day is from 12:00 p.m. until 2:30 p.m. (14:30) This period is usually slower, lacking in activity as compared to A. If and when price in B moves (breaks) out of the high and low range of A, then you have a prime opportunity to trade to the long or short side. It’s best to look for this opportunity early in part B. Part C occurs from 2:30 p.m. until market close. To trade part C, use the range of B to determine the ‘pop’ in direction. December 12 ended in a late-day sell off that could have been used for a decent profit.
Watch the video to see how today’s ABC pattern worked out today!