5 Things to Know Before the Stock Market Opens
What is a Stock Market ?
A stock market can be said to be a group of buyers and sellers of stock, and this shows ownership rights on business, this includes assets, securities that are listed on public stock exchanges, private stocks that can also be listed and traded privately, shares of private companies can be sold to investors. Stocks differ based on country or location. Examples of stocks include; U.S. 30, Facebook, Amazon, RUT (Russell 200 index)
Trading Hours In a Stock Market
When the stock market opens or the regular trading hours? Standard trading hours in the U.S. stock market, the New York Stock Exchange (NYSE) and the (Nasdaq) are open from 9:30 am to 4 pm on weekdays Eastern time. On some days, early closure happens right before the market holiday; regular trading ends at 1. pm Eastern Time. On weekends, there are no set trading hours for Saturdays and Sundays. Trading begins at 6. pm Eastern time on Sundays
What to do Before the Stock Market Opens
Update Yourself with A National Trading News
Preparing early before the opening of a stock market helps the trader understand the direction of the moves in the market. The information got on the news before the market opens the trends in the market if a trading pair is likely to be trending, ranging, volatile or sedate. This intel will make the trader keep up with the day’s happenings.
-Read up on the news from previous trading sessions
-Calculate and analyze setups to ensure trading profits and mitigate losses
-Take note of the activities and directions of the market
Gaps and Correlation with other Markets
As a trader, you need to go back to the previous charts on your trading platform to do backtesting in the direction of the last day’s highs and lows. This helps to check the aggressiveness of a particular stock, e.g. Gold is highly volatile with several breakouts and declines in the prices. With this knowledge, the trader can predict future events in the market.
Conduct Proper Analysis
Analyzing a stock before the market opens is a very technical process. It puts the trader under less pressure or fear of missing out on placing a market order. There are two types of analysis
Technical levels like drawing trend lines, support and resistance lines, setting Fibonacci levels and time frame analysis. Hire the service of Professional analysts to properly guide you on the use of the right trading tools and the right stocks to invest in to maximize profits.
Compare what other traders are doing.
Search for securities or assets by volume and know where your competitors invest their capital. Look out for open positions and stocks that are like spices of the day.
Take note of critical levels.
Key levels are numbers or points where the prices of a specific stock made a significant move.
Find Entry and Safe Exit Points
Finding the correct entry and exit points for a price position in the stock market is vital. Many traders find it difficult to know when to close on a losing stock or when to break even on a trading pair before it goes against the trend. Most investors do not have access to quotes until 90 minutes before the U.S. market opens.
Consider the trading Seasons.
The days of the week time of the month of the year affect the changes in the stock market trends; therefore, a proper understanding of the specific price action that aligns with a market season and time will help avoid losses.
Place limit orders
Setting limit orders before the opening of the market is an excellent step. Place limit orders on stocks but not at the current price and watch it play out when the market opens.
Don’t get lost in the crowd.
While other traders rush in on the market open to place trades and positions, they do nothing while waiting for the traders to get caught up in the wind of trading. Properly evaluate and work on your choice of analysis. Learn to filter the market to sort out the best prices.
Buy high and sell low.
Using this formula helps to know the algorithms of prices of securities.
The careful pre-market activities create enough information and an enabling environment for a successful trading session. It helps one make clear choices on what to do at the stock market opening. These are more than 5 things to know before the stock market opens