Do you know how traders, in USA, trade and what type of details that a trader may need to manage during a typical day? The following article is what I summarized from a book called "Power Trading Power Living". Note: Power Trading means trade all days.
Power Trading (Intraday Timeframes)
8:30 - 9:00 AM - Pre Market
- They check S&P and Nasdaq futures to get a general sense of the overall market bias. If futures are up, then the market at large will likely open higher as well
- They check Online news for special events
- They also Check pre market prices and news for stocks they are interested
9:30 - 10:00 AM - Grap Trading
- Gap up or down at market open. They look for best momentum stocks for a corrective price reversal in opposite direction. Momentum stocks provide greater liquidity and price action, which makes it easier to get in and out of a trade fast, and hopefully, with a nice profit.
- The larger the gap, the better the potential trade
10:00 - 1:00 PM - 10AM Rule In Effect
- After they buy and/or sell short of a stock
- If stock gaps down, they would not sell it short unless it makes a new low after 10:00AM
- Conversely, if a stock gaps up, they would not buy it long unless it makes a new high after 10:00AM.
1:00 - 2:30 PM - Lunch Time Lull / Reversal
- Usually, traders breakaway for lunch from 12:30 - 2:20PM
- During this timeframe, frequently, the market will slowdown or lull in market activity
- As a result, the market and individual stock prices will often drift or move counter to the prior trend.
- It also uncommon for the market to reverse directions either during lunch of soon afterwards
- As lunch time frame approaches, exit the intraday positions, particularly when they have nice gains from riding an AM trade, or tighten your stop-loss orders
2:30 - 3:20 PM - Post-Lunch Activity
As traders come back from lunch, market activity generally begins to pickup. Initially, it may not be clear which direction the market will take but as described in the prior section, it's not uncommon for the market to reverse directions during lunch or shortly afterwards. This is the timeframe when the market decides whether it's going to continue a lunchtime reversal or resume the pre-lunch trend.
3:20 - 3:40 PM - Afternoon Lull
Time for many traders begin taking profits and exiting intraday positions. Time for the market tries to determine where it's going for the rest of the day. It may try to bounce or sell off during this time period as traders juggle their positions.
3:40 - 4:00 PM - Market On Close / End of Day
1. Timeframe for the market to decide how it's going to close
2. Many institutions need to square away their positions by the end of the day. Any imbalances need to be balanced, hence Market On Close orders can provide some indication of what the market may do.
3. They trade at this timeframe, however, they would not to hold the stock over night.
4:00PM+ - After-Hours, News Rules! Happy Day!!!
