Best Time of Day to Buy and Sell Stocks - TRADEPRO Academy TM (2024)

Timing the market perfectly is everyone’s dream! However, it’s always a little difficult to buy the lows and sell the highs. However, there are some guidelines as to what’s The Best times of day are best to buy and sell stocks. They’re dependent on a person’s investment or trading timeline.

In this article, we’re going to talk about both day trading and investing. When to get into markets? It’s a little easier to talk about day trading in the respect of market timing. Because you have set hours to trade. Once the market closes at 4:30 PM EST, you’re out of the market. Simple.

Best Time of Day to Buy or Sell Stocks-Day Trading

When you’re day trading it’s a lot easier to narrow down the hours, when you’re getting in and when you’re getting out. Trading throughout the day doesn’t require traders to be in the market at all times, nor does it require traders to be in front of a computer at all hours of the day. The prime hours for day traders are from the market open at 9:30 AM EST to 11:00 AM EST. There is also a window just before the market close into the last hour or so, 3:00 PM EST to 4:00 PM EST.

Why the morning for day traders? Right off the opening session all of the big money participants enter the market ready to put in client orders or orders for big books. Especially if the orders came in late the prior day. In this short period of time, there is the most movement, meaning the most opportunity. Not to mention at this time of day, an influx of retail money flows into the market, based on what they’ve read or heard on the news the day before. This creates spikes in volatility that professional day traders monitor.

At the end of the day, we have a similar phenomenon, the large money participants usually rush to exit positions. Based on the time of week or month it could be more aggressive. It’s the last chance of the day for traders to get into the market or out of the market. Trading all day is very strenuous on the mind and often doesn’t equate to more reward. So finding the most opportune hours of the day and maximizing the efficiency is what day traders look for.

So if you’re looking to buy or sell stocks intraday, you may want to monitor what the spikes in the volume are telling you. Find trending stocks of the market open and see if the volume in the trend is strong. Will it dictate the move for the rest of the day or is it retail money flowing in on a news event. It’s common practice for new traders to avoid the first 15-minutes of the day. Which isn’t bad, it can keep you out of trouble if you don’t know what you’re looking for. However, there is also an immense amount of opportunity at this time.

Best time of day to buy or sell stocks-Investing (Longer-Term)

When you take a longer-term approach, the intraday aspects don’t influence you as much as they do for day trading. However, they should still be considered. There are days and times of day where it seems a little more favorable to buy and sell stocks even if you plan on holding them for a long time.

If we start on an intraday basis. If you’re buying a stock to hold, try to hold out on the morning volatility and let the trend for the day established. If a downtrend on the day starts off you could find a cheaper price in the morning to get into the stock of choice. This is especially important in new event situations. If a stock has some kind of news that happened while markets were closed or the day before, let that volatility establish and die out. You are still waiting for a trend to form for an opportunity.

There are also certain days that are a little more favorable than others to get in or out of the market. There is historical market seasonality that plays a role in the purchase and sale of stocks which is important to consider.

For example, the start of the week tends to open weaker than the rest of the week in a perpetually long bull market. So a lot of traders tend to look for opportunities to get in at the beginning of the week to take advantage of the potential rally throughout the rest of the week. Monday afternoon is when a lot of market buyers come in to get a piece of the market. On the other hand, traders usually exit positions towards the end of the week. When the position they’ve taken has accumulated good gains, investors don’t want to hold the risk of holding into the weekend. This phenomenon is usually experienced in the middle of the month.

There is also annual seasonality to think of. US stocks tend to pick up in September for the year and slow down in May. There is a saying “Sell in May and go away”. Which induces a mass-market movement. The summer gets slower and big money realizes it’s gains made throughout the year in May. Picking back up and rebalancing their portfolio in September.

Conclusion

Timing the market is what everyone dreams about timing the market to perfection. However, it’s nearly impossible to get it right all the time. There are certain tricks to get better entries as we’ve listed in the article above.

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The information contained in this post is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable for your own financial situation. TRADEPRO Academy is not responsible for any liabilities arising as a result of your market involvement or individual trade activities.