Learning about day trading is a process that takes a lot of time, focus and commitment. Once you’ve chosen your market, purchased the right equipment to manage your trading strategy, and come up with a plan of action, you still need to decide when you’re going to day trade. While deciding when you’re going to trade each day might not seem like a big deal at first, it’s worth noting that consistency is often the key to success with day trading. Whether you’re a beginner or a pro, you’ll need to make sure that you’re consistent by logging into the markets at the same time each day.
When to Day Trade for Stocks
As you begin to explore the day trading market, you’ll notice that certain times of day are better for trading depending on whether you’re trading stocks, futures, or Forex. For instance, some traders will trade for an entire day, from when the stock markets open at 9:30 am until they close in the US market. However, the majority of traders will only focus on their trading activities for a few hours each day. Two or three hours a day is all you need to make some serious cash.
When you’re trading in the stock market, most experts agree that the best time of day is usually the first one or two hours after the markets open, and the last hour of trading before they’re set to close. These are the most volatile periods in the day-trading world, which means that the prices will be moving drastically during this time. It’s important to move fast if you want to make money.
When to Trade Forex and Futures
While stocks are some of the most common things to trade as a day trader, it’s also common to look at futures and Forex. If you plan on trading futures, then most experts recommend timing your trades around the opening of the market. Active futures typically see activity throughout the day; you might find that you get more interest earlier in the day than you would on the stock market. Stick to day trading futures between 8:30 am and 11 am EST in the US market and remember to keep an eye on when the markets close. The last hour trading can be lucrative in Futures, just as it is with stocks.
On the other hand, the Forex market is one of the most versatile when it comes to timing your trades. If you’re planning on trading the USD/EUR pair – like most people getting started in Forex, then you’re going to see plenty of volatility all day long – even at the very start of the day. Forex markets trade 24 hours a day, which means that you’re going to need to track the market during the biggest movement periods. Typically, the most volatile periods are between 12 pm and 3 pm GMT. Remember, day traders don’t need to trade all day to be successful. You’ll often find that you’re much more successful if you can commit to a few hours each day.