Stock Trading Tip 1, Don’t Trade Early Morning

Posted by Blain Reinkensmeyer on Tuesday June 12, 2007

I am starting a new series for the blog on simple but extremely effective stock trading tips for new and intermediate experience traders. I will add a tip every few days like I do stock lingo, and you will be available to find all the tips here.

Stock Trading Tip 1

Stay away from trading any stocks during the first 30 minutes of the day.

The first 30 minutes of trading in the stock market, which are from 9:30 AM - 10:00 AM Eastern time are the MOST volatile of the whole day (alongside the last 30 minutes). Volatility simply means there is a lot of price movement. Why this occurs is because volume is extra high due to the opening bell ringing and trading for the day beginning.

The reason you do NOT want to be playing around with buying and selling stocks during this time, atleast while you are still learning the tricks of the trade is because the probability of you losing is far greater than waiting until lunchtime. There is a lot of money made and lost here and a lot of news has to be integrated into stock prices.

Earnings releases, FDA drug results, Dividend announcements, bla bla could all have been made while the market was closed the night before, OR before the market opened. Have you ever heard of pre and post market trading? These two trade times can cause stocks to open or close on what are called “gaps” or swing one direction very quickly.

Bottom line is that trying to trade during the first 30 minutes day of the day when you are unfamiliar with how the big boys play is like swimming in shark infested waters during feeding time… with a cut arm leaking blood. Atleast wait until the bleeding stops before jumping in ok?

(To stay up to date with all stock trading tips, I highly recommend subscribing to the feed and keeping updated. Google reader is most popular, and hey, it may just save you your financial life…)

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Comment by MillionDollarJourney.com
2007-06-13 10:11:38
Perhaps another hot topic to post about are stock trading strategies! Day trading, swing trading, long term etc.
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Comment by Blain
2007-06-13 10:42:07
written down for future use, thanks FT! twisted
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Pingback by Stock Trading Tips, Learn to Talk Percentages
2007-06-15 01:38:47
[…] It seems you readers enjoyed the launch of this new series of Stock Trading Tips when I spoke about not trading in the early morning, so here is another one for […]
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Pingback by 7 Tips to Having a Productive Financial Morning Routine - Stock Trading To Go
2007-08-21 10:53:31
[…] Wake up before the market opens. The stock market opens every day at 9:30 AM EST and by waking up before you have time to prepare for any potential market surprises or simply set a strategy up for the day. Some traders wake up three hours before the opening bell, some three minutes; it is all based on your routine you develop. Note: I don’t recommend trading in the early hours. […]
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