What time frame do most day traders prefer? Why?
Day trading provides many trading opportunities. However, in order to be successful in day trading, traders must make the right trading decisions.
I have been working as a day trader for 12 years, and every year I see many new faces in this industry.
Most of them belong to one of the following categories:
1. Scalpers who only hold positions for 5 to 30 minutes
Day traders who want to close their positions before EOD.
Type 1 traders (scalpers) only use 5-minute timeframe charts to manage their trades.
Type 2 traders use 15-minute timeframe charts to plan their trades.
Personally, I use 5-minute charts for open positions (trades between 9:15 am and 10:00 am), and 15-minute charts for responsive trades.
I hope this helps!
Is there an optimal trading time during the day?
Is now a good time to apply all the wisdom you have learned?
Let me answer this question for you...
Many day traders forget that day trading means trading within specific time periods, rather than constantly trading. They buy and sell stocks too frequently, ultimately depleting themselves and their resources.
Here, I will discuss the importance of certain trading times.
Certain specific periods offer more opportunities than other times of the day.
When you are not focused on specific times and trade all day, you will encounter the problem of overtrading. Overtrading is definitely something you want to avoid, as it can lead to fatigue and even unpredictable emotional-based trades, which could leave your account with nothing.
Most people do not know the best time for trading. Trading without paying attention to timing may lead you into trouble, because you are not disciplined enough. There are specific times of the day that are more suitable for trading than others.
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When is the best time to trade during the day?
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To understand the best times for trading during the day, we must first understand three important timeframes.
Primary timeframes (timeframes are based on Eastern Standard Time, as this is the standard reference time used in the stock market).
4:00 am to 9:30 am
Pre-market trading hours are from 4:00 am to 9:30 am
Although amateur traders can trade stocks during this time period, it is not recommended to do so. This time period is usually reserved for professional traders working at brokerages, investment funds, and hedge funds. Some amateur traders do indeed trade during this time, but it is advised not to trade during this trading session, as you may be beaten by professionals. Trading during this time requires a deep understanding of stock trading.
9:30 am to 11:00 am.
This time period is when stock trading begins. The trading halls of Nasdaq and the New York Stock Exchange open at 9:30 am.
9:30 am to 11:00 am is a good time for trading, but I recommend waiting until at least 9:45 am or 10:00 am to start trading. We will discuss the reasons for this later.
On average, sticking to trading during opening hours is a good strategy because it is the best time for stock trends and traders can take advantage of this time to profit. It also helps you maintain discipline because you will only trade during this recommended time, rather than aimlessly trading throughout the day.
In summary, the morning is the best time for trading because...
The greater the volatility, the more opportunities there are.
Increased trading volume brings more opportunities to enter and exit positions.
Be more disciplined, because you complete the trades in the morning instead of dragging them all day.
11:00 AM – 2:00 PM
The lunchtime trading hours are from 11:00 AM to 2:00 PM
Usually, the profits from lunchtime trading are not as good as those from morning trading. Although it is possible to open positions during these periods, it is not advisable to do so because the trading profits during these periods are often lower, as volatility in the morning tends to decrease as the day progresses. Most days, I finish my trades before this time period. The main issue with trading during these periods is the lack of trading volume, making it more difficult to earn huge profits during these times.
Finding good stocks during the midday period is like finding a needle in a haystack. The market volatility is very low, not worth spending time trading. Most traders who insist on trading during the midday period often find themselves overtrading, just getting addicted to trading rather than actually making profits.
2:00 PM – 4:00 PM
Trading between 2:00 PM and 4:00 PM will be considered as closing trading. Closing trading is often profitable.
If you are trading all day, it is best to stay in the market at the opening and leave the computer for other things during the mid-day trading period, then come back and check for other activities at the end of the market. Taking a break can prevent you from overtrading and allow you to reassess the market and see what opportunities are available.
This time period is considered as the golden time for trading. Many traders tend to trade during the last hour of the market opening, which is between 3:00 PM and 4:00 PM.
At 4:00 PM, the market will stop opening to the outside.
4:00 PM to 8:00 PM
Just like pre-market trading happens before the market opens, after-hours market trading occurs between 4:00 PM and 8:00 PM.
It's best to stay away from trading during this time range until you become an experienced trader or work in an institution specifically dedicated to day trading.
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How do you know when to make a trade?
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Now that we understand how these three time periods work and which time periods have opportunities, let's see why there is a "best time" when choosing the right time.
This is a conclusion I have reached through years of practice, trial and error, and experience. As a beginner, you need to go through a lot of experimentation, mistakes, and losses to understand this. So please remember, this is valuable information that you should never ignore or forget.
The perfect trading "best point."
Most of my trades are made between 10:30 and 10:45 in the morning.
Based on my seven years of trading experience, I have made over $9 million in day trading, while also making some costly mistakes. I found that the best time for me to trade is between 10:30 and 10:45 in the morning.
Many beginners make this mistake: they try to trade as soon as the market opens. People are too eager to trade and lack patience. I made this mistake when I first started my career as well.
If you do not maintain patience and discipline, you will eventually face losses. If you trade hastily, you will not be able to truly understand or grasp the fluctuations or potential surges. You must give yourself some time after the market opens to truly understand the nature of the market and stocks for the day.
Why wait until the market opens to start trading?
There are several reasons strongly recommending that you wait at least one hour after the market opens before starting to trade.
First, there needs to be sufficient trading volume to change the stock price for maximum profit potential.
For example, in the early hours of the day when the market has just opened, there is not as much trading volume until at least before 9:30 am (unless you are trading a highly volatile stock that frequently appears in the news). At this time, it is almost impossible for me to quickly estimate the stock's trading volume for the entire day, as I only have this short time period as a reference. I tend to wait until at least 10:30 am to start trading because by then I have at least one hour of data to review, which will help me decide which trades to make based on changes in charts, flow, and other data points.
The reason why I trade between 10:30 am and 10:45 am is because I have sufficient time for the charts to start forming patterns that I can identify.
In addition, when the market has just opened, it is still considering everything and events that occurred before the close. This increases volatility. As a beginner, you must completely avoid the time before and after the market opens to avoid any losses.
After the market opens, you must wait at least 30 to 45 minutes before starting to trade. This time is for your observation, during which you can study the market performance in the early morning.
Most experienced traders like me usually stop trading at 11:30 in the morning because volatility and trading volume tend to decrease significantly after that.
In addition, trading at specific times during the day ensures that I don't trade non-stop all day and gives me the opportunity to enjoy life and do things I love, such as playing StarCraft, going out with friends, driving my car, and relaxing by the pool.
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Your next step...
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Please remember that these suggestions apply in most cases, but there are sometimes exceptions, depending on constantly changing market conditions or certain events. However, these suggestions are generally important.
Sometimes, you may profit during non-recommended times, and sometimes you may incur losses during "good" times. This is all part of the game, and it is also inevitable in many of your trades, but you want to minimize losses as much as possible. It is important to stick to the basic principles, listen to mentors' advice, and stay focused. The goal is to profit frequently.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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成熟投资者：格局，概率，取舍。没有格局必然急功近利。不计概率会把运气当技术。不懂取舍，有所不为，最后必落入陷阱和圈套。
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KingNY-Life : Good post