The MCX recognizes the 5- 6 pm session as Session 2 and the 10- 5 pm session as 1.
This is important even as the MCX functions from 10.00 am to 11.30 pm seamlessly it makes a distinction between the same session.
We all know that there is extra volume and more liquidity which comes in the MCX post 4 pm as traders trade on the LSE and the COMEX.
In keeping with the above , we would be introducing another IB band in the charts which will monitor the IB from 5- 6 pm every trading session.
The IB is simply initial balance. In Market Profile it is the best example of two time frame movement seen in the early part of the session and a range extension above the IB point ( or below) is the best example you can get of longer time frame players entering the market and moving the instrument.
This will be very useful for traders who trade in the evening session only. An extension of the Market above the evening IB band would be new volume entering the market and a long condition or long interest.
In the absence of an extension above the IB band of the evening, one can safely assume that the market does not want to go higher.
Here are some charts with the second IB band shown as bluish grey.
Copper :
Copper traded below the Second IB band after 6 pm and even went to the IBH ( the first hour high).
Crude :
Crude also stayed below the blue band of 5-6 pm as can be seen.
What is helps us to see is whether there are more longs interested in moving the market or shorts.
The Rule for IB breaks is to check for longs above IBH and shorts below IBL so we get a bias of the market right.
Natural Gas :
NG broke above vwap as also the 5- 6 pm band as new longs came in the instrument.
So it’s easy to see how to apply the right bias to the market with this second IB.
I would like to thank Vicky, Rajan and a few other MCX traders who suggested we implement this change.
We take your suggestions seriously, so do keep writing in.
If there are any questions on the above , would be happy to assist.