When trading intraday or even when we are looking to enter a swing trade, knowing what is happening due to the time of day is something we should concern ourselves with. We know that placing trades before major announcements like economic data or earnings is extremely risky. But entering a trade before a typical reversal period could prove disastrous as well.
In previous articles I have discussed the pre-open and call auction that dictates the gaps and some price movement in the morning. There are other times that you need to be aware of as well. After the initial rush of orders being filled at the open, there will usually be a small reversal in price. Do not get caught up with the amateurs and jump in at the open unless you are trading a specific strategy.
If there is an overall bullish sentiment amongst investors due to the trend, news or earnings, then there will be a flood of buy orders to be filled at the open. Most of the orders will be filled in the call auction of the pre-open. There may be enough orders that flow into the… Continue Reading
