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Best Times of the Day to Buy and Sell Stocks in 2022

Best time to day trade

Best time to day trade

When is the ideal time to trade the stock market?

  • 9:30 to 10:30 am ET is often the best hour of the day for trading _ it offers the biggest moves in the shortest amount of time
  • 3 to 4 pm ET offers a similar opportunity

When it comes to day trading, sometimes little is more. For most stock, stock index futures, and index-based exchange-traded funds (ETFs) traders, devoting two to three hours a day is frequently preferable to buying and selling equities throughout the day.

Trading exclusively during these hours can help you optimize your efficiency because specific hours provide the best possibility for day trading. Trading all day consumes far more time than is required for little additional gain. Even professional day traders lose money outside of these ideal trading hours in many circumstances.

  1. It makes sense to concentrate on the optimal hours for buying and selling stocks rather than risk losing money at other times.
  2. The beginning and conclusion of the day—the first and last two hours—tend to be the greatest periods to trade the stock market.
  3. Because the opening and end hours of the day are typically the most volatile, they can be advantageous for more experienced traders.
  4. Historical trends can provide insight into what markets may do in the coming weeks, months, or years, but they are never certain.

» Learn more: Read our explainer on How much do day traders make: Daily trader income

When is the best time to day trade in the stock market?

The first two hours of the day may be the greatest time to day trade the stock market. This is when the market opens at 9:30 am. EST and closes at 11:30 am. EST in the United States. The last hour of the day could also be a good time to day trade. That is 3 pm. to 4 pm. EST in the United States.

Take the time to learn about the trading hours of the stock market you want to trade so you can make sure you're trading at the best times.

When the Market Opens, You Can Trade

Many traders just need to trade for the first one to two hours after the stock market opens on any given day. The first hour is usually the most turbulent and offers the most opportunities (and potentially the most risk). Professional traders frequently recognize that a lot of "stupid money" is moving at that time, despite how harsh it may sound.

People making trades based on what they read in the news or saw on TV the night before is known as "stupid money". The information on which these people act is usually outdated. Their trades have the potential to cause large price swings in one direction. Professional traders then take advantage of the excessively high or low price and push it in the opposite direction.

New-day traders are sometimes advised not to trade during the first 15 minutes of the day, which may be sound advice for inexperienced traders, but for seasoned traders, the first 15 minutes typically provide the best possibilities. In the beginning trends, such a time period can generate the day's biggest deals.

» Learn more: Read our explainer on How to Trade the Market in 7 Steps

The best time to trade throughout the day.

Regular trading begins at 9:30 am. EST, thus the hour ends at 10:30 am. EST is frequently the ideal time to trade. It allows you to make the most significant moves in the smallest amount of time.

Because volatility and volume tend to fall down about 11:30 am, many professional day traders quit trading. Trades take longer to complete, and changes are smaller on lower volume, which is not ideal for day trading.

During the weekday, futures trade almost 24 hours a day, so if you're day trading index futures like the E-mini S& P 500 (ES) or an index-based ETF like the SPDR S& P 500 (SPY), you might start trading as early as 8 am. and taper out around 10:30 am. That gives you a solid two hours of trading time, usually with a high-profit margin.

Trading can go on until 11:30 am. EST, much like stocks, but only if the market is still presenting possibilities to profit from your trading strategy.

» Learn more: Read our explainer on How does the stock Trading market work

Trading During the Last Hour

Many day traders trade in the later hours of the day, between 3 and 4 pm EST. Traders will have had a long break since the morning session, giving them time to regroup and refocus.

When looking at frequent intraday stock market trends, the last hour can appear a lot like the first. There are a lot of large moves and sharp reversals in it. Similar to the first hour, many amateur traders enter the market during the last hour, buying or selling based on the day's events. Dumb money is circulating again, though not as much as it was earlier in the day. It's time for more experienced money managers and day traders to gobble it up.

Trading can be especially lively in the last few minutes, with large changes on high volume.

When are the best days and months to trade stocks?

Beyond the hourly grind, keep the big picture in mind as well. Because the market traditionally drops at the start of the week, particularly around the middle of the month, Monday afternoon is usually a good time to buy. Many experts advise selling on Friday before the Monday dip, especially if it's the first day of the month or the Friday before a three-day weekend.

Similarly, prices tend to fall in September before rising again a month later. In general, October is a bullish month, and prices often rise again in January, especially for value and small-cap companies.

Final Thoughts

Day trading demands both discipline and attention, which are muscles in and of themselves. The muscles will give out if they are overworked. Trading for two to three hours a day may keep you sharp and avoid mental tiredness, which can have a bad impact on your work. Trying to trade for six or seven hours a day will exhaust you and leave you vulnerable to errors.

Everyone, of course, has varying levels of focus and discipline. Some traders may be able to purchase and sell all day and do so profitably, but most traders benefit from trading primarily during the hours when day trading is most profitable.

Day trading is not for everyone, and it comes with a lot of rules and risks. Before you start trading real money, make sure you understand how to day trade and practice to see whether it's suited for you.

» Learn more: Read our explainer on What is a Spread in Forex Trading?

Most Commonly Asked Questions (FAQs)

When does the after-hours stock market close?

From 4 pm. until 8 pm. EST, there is after-hours trading.

What happens if I place a stock market order after business hours?

You might be able to place an after-hours market order depending on your brokerage (assuming someone is willing to sell). The after-hours market, on the other hand, has a lower trading volume, which has an impact on liquidity and price action. Limit orders can help you manage these price swings, and some brokerages may require traders to use limit orders during after-hours trading.

In Pacific Time, what are the stock market hours?

Stock market hours for individuals on the West Coast of the United States are 6:30 am. to 1 pm PST.

When does the Japanese stock exchange open?

The Tokyo Stock Exchange is open Monday through Friday from 9 am to 3 pm. local time, with a one-hour lunch break at 11:30 am. Because Tokyo is ahead of the United States in time, it's 7 pm. (the previous day) to 1 am EST.

Don't forget to read: Top 7 Steps To Learn Successful Trading


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