What is the 11am rule?

Does this old trading rule still stand true today?

So sometimes you hear these sayings and rules that traders used to come up with before charts, ChatGPT, and Instagram gurus…

And these rules were based on simple observations about the market’s rhythm and structure.

I’m going to explore a few more of these over the next few weeks, but today I want to focus on the 11 am rule.

What is the 11 am rule in trading?

The 11 am rule suggests that if a market makes a new intraday high for the day between 11:15 am and 11:30 am EST, then it’s said to be very likely that the market will end the day near its high.

The idea being that if there hasn’t been a push lower by 11 am, then demand is persistent, sellers are scarce, and we could be in for a trend day higher.

Here’s a chart example:

A new high at 11.25 EST on the S&P 500, closed the day at highs.

Here’s another.

So, this did actually close at highs, but your trade timing would have had to be on point to make this one work…

You get the idea…

Now I haven’t backtested this, but my gut says this makes sense.

I found some data to suggest this rule applies 75% of the time, but I’ve not done my own digging yet.

When I do I’ll share my findings.

I wonder if it works in other markets too…

Meanwhile, it’s something to think about, and if true, it’s another one of these little edges you could layer into your trading strategy for potentially improved returns.