What time frames do most day traders like? Why?
Day trading provides many trading opportunities. However, 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
2. Day traders who hope to close their positions by the end of the day.
The first type of traders (scalpers) only use 5-minute time frame charts to manage their trades.
The second type of traders use 15-minute time frame charts to plan their trades.
Personally, I use 5-minute charts for intraday trades (trades between 9:15 AM and 10:00 AM), and use 15-minute charts for swing trades.
I hope this is helpful!
Is there an optimal trading time of day?
Is now a good time to apply all the wisdom you have learned?
Let me answer your question...
Many day traders forget that day trading means trading within specific time periods, rather than constantly trading. They buy and sell stocks too frequently, eventually exhausting themselves and their resources.
Here, I will discuss the importance of certain trading times.
Certain specific time periods offer more opportunities than other times of the day.
When you are not focused on specific times and trade throughout the day, you may encounter the problem of overtrading. Overtrading is definitely something you want to avoid because it can lead to exhaustion and even unpredictable emotional trading, which could wipe out your account.
Most people do not know the best times for trading. Trading without attention to timing can lead you into trouble because you are not disciplined enough. There are certain times of the day that are more suitable for trading than others.
===================================
When is the best time to trade during the day?
===================================
In order to understand the best times for trading during the day, we must first understand three important timeframes.
Primary timeframes (timeframes are referenced to Eastern Standard Time, as this is the standard reference time used by the stock market).
4:00 AM to 9:30 AM in the morning.
Pre-market trading hours are from 4:00 AM to 9:30 AM in the morning.
While retail traders can trade stocks during this time period, it is not recommended. This time period is typically reserved for professional traders working at brokerage firms, investment funds, and hedge funds. Some retail traders do engage in trading during this time, but it is advised not to trade during this trading session as you may be outmatched by the professionals. Trading during this time requires a deep understanding of stock trading.
9:30 AM to 11:00 AM in the morning.
This time period is when stock trading begins. The trading floors of NASDAQ and New York Stock Exchange open at 9:30 AM in the morning.
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 the opening hours is a good strategy as it is the time when stocks tend to perform best and traders can capitalize on the market trends during this period. It also helps to maintain discipline, as you will only be trading during the suggested time instead of trading aimlessly throughout the day.
In short, the morning is the best time for trading because...
- The greater the volatility, the more opportunities there are.
- Increased trading volume brings more opportunities for entering and exiting positions.
- More discipline, because you finish trading in the morning instead of dragging it out all day.
11:00 AM - 2:00 PM
The lunch trading session is from 11:00 AM to 2:00 PM.
Usually, the profits from the lunch trading session are not as good as the morning trading session. Although you can open positions during these hours, it is not recommended because the trading profits during these hours are often lower, as the morning volatility tends to decrease as the day progresses. Most days, I complete my trades before the start of this time period. The biggest issue with trading during these hours is the lack of trading volume, which makes it more difficult to earn huge profits.
Finding good stocks during the lunch period is like finding a needle in a haystack. Market volatility is very low, and it is not worth spending time on trading. Most traders who insist on trading during the lunch period often find themselves overtrading, simply addicted to trading rather than actually making profits.
2:00 PM - 4:00 PM
The trading between 2:00 PM and 4:00 PM will be considered as the closing trading session. Closing trading session is often profitable.
If you are trading all day, it's best to stay in the market at the opening and leave the computer during the midday trading session to do other things, and then come back to check 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 arise.
This time period is considered the golden time of trading. Many traders tend to trade in the last hour of the market opening, from 3:00 PM to 4:00 PM.
At 4:00 PM, the market will stop trading.
4:00 PM to 8:00 PM
Just like pre-market trading happens before the market opens, after-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 specializing in day trading.
==========================
How do you know when to trade?
==========================
Now that we understand how these three time periods work and which ones present opportunities, let's take a look at why there is a 'best timing' when it comes to choosing the right time.
This is a conclusion I have reached through years of practice, mistakes, and experience. As a beginner, you need to go through a lot of trial and error 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 done between 10:30 AM and 10:45 AM.
Based on my seven years of trading experience, I have made over 9 million dollars in day trading and also made some costly mistakes. I found that my best trading time is between 10:30 AM and 10:45 AM.
Many beginners make this mistake: trying to trade as soon as the market opens. People are too eager to trade and lack patience. I made this mistake early in my career as well.
If you do not maintain patience and discipline, you will eventually face losses. If you rush into trading, you will not truly understand or grasp the fluctuations or potential surges. You must give yourself some time after market opening 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 strong reasons why it is strongly recommended to wait at least one hour after market opening before starting to trade.
Firstly, there needs to be enough trading volume to change stock prices for maximum profit potential.
For example, earlier in the day when the market has just opened, there won't be as much trading volume until at least 9:30 in the morning (unless you are trading a highly volatile stock that frequently appears in the news). At this time, it is nearly impossible for me to quickly estimate the full day's trading volume because I only have such a short time frame to reference. I tend to wait until at least 10:30 in the morning to start trading because by that time, I have at least one hour of data to review, which will help me determine which trades to make based on changes in charts, flow, and other data points.
The reason I start trading between 10:30 and 10:45 in the morning is because I have enough time for the charts to start forming patterns that I can recognize.
Additionally, when the market has just opened, it is still considering everything and all the events that occurred prior to closing. This increases volatility. As a beginner, you must completely avoid the time around market open to avoid any losses.
After the market opens, you must wait at least 30 to 45 minutes before starting to trade. This time is your observation time where you can study the market performance for the morning.
Most experienced traders like me generally stop trading around 11:30 in the morning because volatility and trading volume will start to significantly decrease 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 like, such as playing StarCraft, going out with friends, driving my car, and relaxing by the pool.
=============
Your next step...
=============
Please remember that these advices generally apply in most cases, but there are exceptions at times, especially when to trade, which typically depends on the constantly changing market conditions or certain events. However, these advices are generally important.
Sometimes, you may profit during non-recommended periods, and sometimes you may incur losses during 'good' times. This is all part of the game and is also inevitable in many of your trades, but you want to minimize losses as much as possible. It's important to stick to the basic principles, listen to mentor advice, and stay focused. The goal is to make profits consistently.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
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。
1354Followers
71Following
7601Visitors
Follow
105519893 : I've been taught
pam shi : Thank you teacher, I never miss any of your posts, thank you for your selfless sharing.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
KingNY-Life : Good post