How to Trade Power Hours

by | Oct 26, 2021

  • How you can better time your trades (and not be like the 90% of traders who FAIL)…
  • The key differences between the market open and close…

Hey, Evolver.

It’s no mystery that some times of the day are more exciting to trade than others.

I love trading the market open and close — the two most volatile periods of the trading day. But I approach the two very differently. 

Let’s talk about why and how I trade power hours…

The Opening Bell

In the first 30 minutes of trading, I usually have a specific game plan. Let me explain…

As the opening bell approaches each morning, traders are excited. 

The entire market has been anxiously waiting all night — everyone’s ready to go

While you may think this exuberance could lead to bullish setups, I often find the opposite to be true. 

On overextended stocks, the first 30 minutes of trading can bring HUGE opening flushes.

This is why the market open can be an amazing time to trade first red day setups. 

Note: Monday mornings can be even more volatile after everyone’s been holding their breath all weekend.

So how can Evolvers prepare for these incredible opening dumps? 

  • Have your watchlist prepared and organized the night before.
  • Focus on your most bearish setups near the opening bell.
  • Watch closely for failed morning spikes (or gap and crap price action) to short.

If a stock’s cracking a key support level, the opening flush can be an ideal time to nail bearish patterns. 

The Closing Bell

The end of the trading day is often crazy as well — but in a different way. 

Seasoned Evolvers know I have a negative bias. I rarely go long these days. 

But when I do go long, it’s into the closing bell. You may be wondering why I like to go long into the close…

After the morning exuberance settles, the energy around the close feels different…

As the closing bell draws near, traders rush to get all their orders in. They’re all positioning themselves for the following day. 

This gives big percent gainers time to prove themselves before I pull the trigger on the long.

This is why I often execute my long trades in the last 30 minutes of the trading day.

That being said, I still prefer to trade puts most of the time. For me, the leg down has always been easier than the leg up.

But if you’re tracking a bullish setup, follow my lead. Try to put the trade on toward the end of the day.

Lesson Summary

  • The open and the close are the two most volatile periods of the trading day. This can make them great times to day trade…
  • Look for bearish patterns first thing in the morning. Big opening flushes on the first red day are some of my favorite setups out there…
  • Look for bullish patterns into the close. When momentum runners are gearing up for another big green day, they often ramp into the close…

Conclusion

Don’t fight the market. Trade when the biggest moves are happening — near the open and the close.

There’s no golden rule. But try to make sure you’re trading the right setups at the right time. 

I find focusing on morning bearishness (and afternoon bullishness) can make the decision easier.

Meet Mark:

Mark Croock is a former accountant who after studying under Millionaire Trader Tim Sykes turned his small account into $3.19 Million in trading profits by applying Tim’s strategies to options trading.

He started Evolved Trader to pay it forward and help other traders learn how to leverage options

 

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