Did you know that the tendencies that occur in U.S. stocks can be broken down into sequential order for a "usual" trading day? While reviewing this information, remember that the times listed are approximations, which means you cannot expect to see a pullback/reversal each day at the exact same time. What you will see is that the pullbacks are common near the times listed.
Each of the times
listed here are present in Eastern Standard time, with opening taking place at
9:30 AM and the close being at 4 PM.
The tendencies are
also based on the index movement, which is an average of several stocks and
there may be slight differences in some cases.
9:30 AM
Opening time/bell is also when there is a push in a certain direction. The
price may also begin to whipsaw to and from a few times, but in most cases, one
direction is going to prevail.
If you don't see
too much movement in the initial 15 minutes, it may be a slow day overall. The
initial hour is the most volatile time.
9:45 AM
The dominate direction that the price moved in is usually the initial test. There
is either going to be a noticeable pullback or a complete reversal of the
trend.
10 AM to 10:30 AM
This is another time when the "gut check" for the trend is going to
come into play. This is when another major correction against the existing
trend is going to occur. It can be a full reversal or a pullback. You can look
at the context of the actual price moves to determine what to do.
11:15 AM to 11:30
AM
The London stock market will close at 11:30 AM ET. Between this time the
European traders are getting out of their positions, which is when a new low or
high is created or tested. These are usually the last significant moves prior
to the price settling down over lunch.
1:30 PM to 2 PM
This is when the trends are most likely to be reasserted. Watch out for a
breakout during this time.
2 PM to 2:45 PM
There isn't too much to watch but you should be wary. It is getting closer to
the end of the day, with many people shuffling for their positions.
3 PM to 3:30 PM
The trend may swiftly change during this time. In many cases, the period is a
"shakeout" when individuals may begin to try and reassert themselves.
In some cases, you can make money, but don't count on it.
3:55 PM to 4 PM
Unless you have a certain strategy in place for trading in the last few minutes
of the day, then you should finish up three to five minutes prior to closing.
The US markets are going to have a closing auction, and everything is done in a
single transaction, which occurs at 4 PM.
As you can see, by
knowing how stock prices usually behave at different times of the day, you will
have a competitive advantage over those traders that do not. This knowledge can
lead to more profitable trades and to success in you trading.
Article by Luis Nieves
No comments:
Post a Comment