Do you trade on stocks, stock index futures, or index-based exchange-traded funds (ETFs)? If yes, when do you prefer to trade? Is it in the morning, afternoon, evening, or at night? In this, you will learn the best times of the day to buy and sell stocks? You will definitely learn the exact hours you can trade and maximize your profits. Trading a day is not ideal as it may yield very little additional reward. Also, a lot of professional day traders usually lose money outside the trading hours.
Best Times to Day Trade the Stock Market
The best times to day trade the stock market is actually the first two hours of the day. In the U.S., this is from 9:30 a.m. ET to 10:30 or 11:30 a.m. ET. Another ideal time is the last hours of the day. In the U.S., it is from 3:00 to 4:00 p.m. ET.
Stocks – Trading When the Market Opens
Trading during the first one to two hours the stock market is open on any day is your best deal. As a matter of fact, a lot of traders only do this. This first hour is usually the most volatile with the very best opportunity. Even professional traders sometimes know that a lot of “dumb money” is flowing at this time. You can try this out.
But, wait a minute, what is dumb money? Dumb money is the phenomenon of people making transactions depending on what they read in the news or saw on TV the previous day. Usually, this information they act on is typically old news. Also, their trades in most cases only create sharp price movements in one direction. Because of this, professional traders hijack the chance of the overly high or low price and push it back the other way. In the end, they buy stock and make lots of profit or sell the ones they have.
Furthermore, new day traders are usually warned against trading within the first 15 minutes of the day. This is a piece of good advice for them. However, these first 15 minutes actually give the best opportunities for seasoned traders. This time period can provide the day’s biggest trades on the initial trends. If you are a seasoned trader, take advantage of this.
Best Trading Time of the Day
The fact is that regular trading starts at 9:30 a.m. ET and ends at 10:30 a.m. ET. This is the best time of the day to trade and make the biggest moves within a short time. People who want an extra trading hour can extend their session to 11:30 am. Even a lot of professional day traders stop trading around 11:30 a.m. they know that at this time, volatility and volume of traders are high and trades take longer, and moves are smaller on lower volume.
On the other hand, Futures trade is 24 hours per day on weekdays. For people trading index futures like the E-mini S&P 500 (ES) or an index-based ETF like the SPDR S&P 500 (SPY), they can start by 8:00 a.m. during pre-market hours and stop around 10:30 a.m. 2 hours of profitable trading is not bad at ll.
However, if the market is still providing opportunities to capitalize on the trading strategies you’re using, you can keep trading till 11:30 a.m. ET.
Trading During the Last Hour
You can trade the last hour of the day, precisely from 3:00 to 4:00 p.m. ET. Usually, by that time, traders have had a long break since the morning session, this helps them to regroup and regain their focus. It works with the common intraday stock market patterns as early hours of the day. At this time, you will enjoy bigger moves and sharp reversals. Traders also get dumb money here but not as much as during early hours. The last few minutes of trading give lots of profit.
Stocks – Best Days and Months to Trade the Stock Market
What about the best days to trade? Monday afternoon is usually the most ideal time to buy since the market historically tends to drop at the beginning of the week, especially at the middle of the month. Lots of experts highly recommend selling on Friday before that Monday dip happens especially if that Friday is the first day of a new month. Also, prices usually drop in September and then hike in October and January. Even though historical trends give investors insight into stock prices and when best to sell or buy, it is not guaranteed. The stock market can fluctuate at any time.
If you really have to trade during the day, be disciplined and focused. Take it seriously and make the best of it. It will also give you the best deals. Don’t forget that it is more profitable and less time-consuming than spending a whole day trading. However, day trading is not for everyone, some people may not cope with the rules and risks. Understand everything before starting.
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