Some experienced traders have managed to make stocks, shares, assets and other investments their full-time job, spending hours in front of a screen to ensure success. Then there are others who prefer the relative safety of long-term investing with large-cap, blue-chip stocks. Some have even found solace investing with an IRA. However, many individuals prefer to keep their action to just a few hours per day or per week, and, for those people in particular, it’s important to know when it is best to be active on your chosen platform. This article is a basic guide to the best times to get active and invest. We recommend that you also do your own research to discover which approaches best fit your chosen techniques.
US Stock Market Holidays
If you’re planning your investment schedule or calendar, be sure to take into account the stock market holidays wherever you’re trading. For example, US stock market holidays usually include New Year’s Day, Martin Luther King Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Many markets will close at around midday on the day before Thanksgiving and Christmas Day.
Day and Night Trading
From Monday to Friday, the US stock market opens at 9:30am and closes at 4pm ET. This goes for both the New York Stock Exchange (NYSE) and the Nasdaq Stock Exchange. Official after-hours trading takes place between 4pm and 6:30pm, and pre-market action operates between 8am and 9:30am. There are additional pre- and post- market sessions for certain stocks depending on the platform you use, some of which extend trading windows to between 9am and 1am. While many people believe that overnight trading is where the real profits lie, this approach can be risky, as most investors tend to stick to stock market hours. This means that evenings and weekends are quieter with fewer individuals with whom you are able to interact with. Forex – or currency investment within the Foreign Exchange – works 24 hours a day as, of course, it covers the entire globe, however, there are peak times.
The most active hour on the US stock market lies between 9:30am (when the market officially opens) and 10:30am. Of this hour, the first 15 minutes is the most intense. While the largest profits can be made at this point in the day, it’s also the time of greatest loss. Due to its volatility, 9:30am – 10:30am is better suited to experienced investors – so, if you’re new to the stock market, it’s best to build your knowledge and skills before you plunge in first thing in the morning. There is also a power hour – 3pm to 4pm, the last hour of the day. The build-up to this period begins at around 2pm and gradually increases in volatility. As a result, mid-day at around 11:30 is perhaps the calm and most stable time to get active. You won’t see quick results, and massive returns are less likely, but there’s also less chance of a huge loss. It’s also worth noting that stock prices fluctuate throughout the week – and, indeed, the year. Stock tends to be cheaper on Mondays and more valuable on Fridays, for example, and prices also regularly drop in the late summer, then begin to pick up mid-fall and rise further in January.
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