What Time of the Day is Best to Trade?

What Time of the Day is Best to Trade?

Are you an aspiring day trader who is trying to learn the best times to trade stocks? If so, then you have come to the right place. Today, we are going to learn what the peak times for day trading. With this information, you can plan your trading day. Let’s get started, shall we?

Less Is Sometimes More

When newbies first start out day trading, they often fall for the misconception that they need to be actively trading the entire time the markets are open. But that simply isn’t the case.

In fact, trying to trade all day might just work against you and end up costing you gains. If you take a look at most professional day traders, you will notice one thing.

Often seasoned traders only need a few hours of trading a day. Trading 2 or 3 hours a day will allow you to focus on what’s important and avoid making costly mistakes.

When Is The Best Times To Buy Stocks?

Now that you have found out that you only need a few short hours of trading to make sufficient profit, when should you get started? That is a very important question that we will answer right now.

Monday is a great day to trade stocks because this is when the market historically tends to fall. Prices drop at the opening bell and you can find some real value during this period of time. Because of this price drop, most traders tend to sell their positions on Friday.

The First Few Hours of The Day

Most professional day traders take advantage of the first few hours after the opening bell. This is when stocks are the most volatile and you can take advantage of the swings in price. Taking advantage of this opportunity is how many seasoned day traders make their full-time living.

The reason why the market is so volatile is because of what traders often refer to as dumb money. Dumb money is when people make trading decisions after reading newspapers or watching news reports the night before the opening bell.

They trade on this often old news which is not up to date or accurate at the time the markets finally open.

This often pushes the market in one direction and those who are professional day traders make profit off the corrections.

When Does the Opening Bell Ring?

A normal trading day begins when the markets open at 9:30 AM Eastern Standard Time. From 9:30 to 10:30 EST is often the best hour of the day to trade.

As you have learned above, it is the most volatile and when people often push the market in one direction during the opening bell. In that golden hour, the markets will often correct themselves when new news becomes available giving you a chance to profit.

The Last Hour of The Trading Day

Some day traders like to trade a few hours in the morning and then one hour before the closing bell. Between 3 PM EST and 4 PM EST, many traders try to take advantage of last minute volatility.

By having that long break after the morning session, many traders have had enough time to relax and can make some additional profits during the last hour of the day.

Ross Cameron

About the Author:

Ross Cameron is a full time day trader and is the owner of Warrior Trading (warriortrading.com).  At Warrior Trading Ross hosts a Day Trading Chat Room and teaches Day Trading Courses to beginner and even advanced traders.  Over the years he has offered day trading webinars and seminars for many large companies including eSignal, Trade-Ideas, Lightspeed Financial, and Speedtrader.  In 2016 Ross was nominated for a Benzinga Fintech award for Best Educator. Also check out his YouTube channel and his book How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology .

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