The First Hour Is For The Day Traders
Active markets are always the best markets for trading. Anyone who has ever traded these markets for a considerable amount of time knows that the first hour to ninety minutes is the best part of the trading day. This is a time period when there is volume in the market and the key support and resistance levels are great for trading.
If you have ever looked at an intra-day chart of a stock or index you will notice that the trading volume declines dramatically after the first hour to ninety minutes of the session. The morning period is when day traders must seize the moment. This is when the markets are most active, once 11:00 am rolls around the markets become manipulated by the institutional traders. The institutions aim to simply stop out small retail futures traders. Take a look at the choppy sideways range experienced in the chart below after 11:00 am and you will see what I mean.
This type of game playing goes on everyday in all active stocks and indexes. Sure, once in a while the markets will be active throughout the entire session, however, that is not normally the case. All leading stocks such as Google Inc.(NASDAQ:GOOG), Chesapeake Energy Corp.(NYSE:CHK), and Broadcom Corp.(NYSE:BRCM) become difficult to trade after the morning session. These are just a few of the countless stocks that will trade in an erratic manner after the first ninety minutes of the day. Day traders should focus on the morning session and leave the three hour lunch time game playing to the institutions.