Unlike traditional investing, trading, or day trading, has a very short-term focus. Analysis may be broken down to days, hours and even minutes. Because day trading focuses on such short time frames, the time of day in which a trade is made can be an important factor to consider.
First thing in the morning, market volumes and prices can go wild. The opening hours represent the window in which the market factors in all of the news releases since the previous closing bell, which contributes to price volatility. A skilled trader may be able to recognize the appropriate patterns and make a quick profit, but a less skilled trader could suffer serious losses as a result of this volatility. If you are a skilled trader, then you may want to consider trading immediately following the opening bell, but if you are less skilled as a trader, you may want to avoid trading during these volatile hours.
First thing in the morning, market volumes and prices can go wild. The opening hours represent the window in which the market factors in all of the news releases since the previous closing bell, which contributes to price volatility. A skilled trader may be able to recognize the appropriate patterns and make a quick profit, but a less skilled trader could suffer serious losses as a result of this volatility. If you are a skilled trader, then you may want to consider trading immediately following the opening bell, but if you are less skilled as a trader, you may want to avoid trading during these volatile hours.
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