Have you ever thought about this? When is the BEST time of day to place a stock trade, or any trade for that matter. As I think back to the many times I have placed a trade, a good portion of them have been not too far from the open. But it also seems like most of the times I ended up regretting entering that trade by the close of the day because the candlestick changed to something more bearish.
So it seems like the BEST time to place any trade from now on is between 3pm to 4pm. In fact this may be such a powerful time to place a trade that maybe it should be the ONLY time to place a trade. Professionals tend to close the market. And maybe amateurs are the ones getting in at 9:30am.
But I also realize that sometimes a stock will gap up right in the AM and breakout over the range and then just keep going higher all day. In those cases you stand to miss out on all the daily gains and then are at risk of getting in right on a peak of short term strength. But on the other hand at least you have confirmation that the stock is strong and did not do an intra day reversal by end of day which can be costly in terms of commissions and risk management.
So it is definitely worth consider only place initial trades between 3 and 4 pm. This is the time where the market has matured throughout the day and where market must decide how to close. The close is the most important price to be aware of. it is what shapes the charts and determines to a large degree what the next day will hold.
For example today I wrote about the sp500 Rejecting the range under 1332. The sp500 closed above the range and rejected the lows. But it did so by the CLOSE of market. I think the trader who waited until 3pm to 4pm and preferably between 3:55pm and 3:59pm would be at a much greater advantage today.
The traders that became scared when the DJIA was down 80 points today ended up paying a commission and maybe a lost opportunity.
I do not recall ever reading any trading book or hearing any pro traders advice that ALL Trades should only be placed between 3:55Pm and 3:59Pm but I am starting to think this could help overall trade management and success over the longer term quite a bit…