The First Hour Is For Day Traders
Active markets are always the best markets for trading. If you have traded the markets for a considerable amount of time, you know that the first hour to ninety minutes is the best part of the trading day. This is a time period when there is typically high volume in the market. The higher activity allows for the key support/resistance levels to be great trading points.
If you have ever looked at an intra-day chart of a stock or index you will notice that the trading volume declines dramatically after the first hour to ninety minutes of the session. The morning period is when day traders must seize the moment as the markets are most active. Once 11:00 am ET rolls around the markets become manipulated by the institutional traders. The institutions aim to stop out the small retail futures traders for a loss. Take a look at the choppy sideways range experienced in the chart below after 11:00 am and you will see as example of this.
This type of game playing goes on everyday in all active stocks and indexes. Sure, once in a while the markets will be active throughout the entire session, however, that is not normally the case. All leading stocks such as Google Inc.(NASDAQ:GOOG), Chesapeake Energy Corp.(NYSE:CHK), and Broadcom Corp.(NYSE:BRCM) become difficult to trade after the morning session. These are just a few of the countless stocks that will trade in an erratic manner after the first ninety minutes of the day. Keeping this in mind, day traders should focus on the morning session. Leave the three hour lunch time game playing to the institutions, enjoy your profits and only trade when the time is right.
Knowing exactly what the institutions do and the games they play will allow you to increase your profitability, and decrease your potential for losing. Join the Pros for free, when the opening bell rings Monday morning have them on your side live in our Intra Day Stock Chat. Learn from the best and become the best. Start your Free Trial now click here.
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