Intraday Trading

Choosing The Best Time Frame for Intraday

Intraday trading is all about the old saying "less is more". It might be wise to limit intraday trading to key hours, rather than buying and selling stocks throughout the day. For traders who trade with index futures, stocks, and ETFs, it has been proven that trading only one to two hours per day is more profitable.

The best time frame for intraday trading

Long-term intraday traders will benefit from finding the most optimal time frame. These hours are well-known for market activity and can be used to maximize your efficiency. Day traders who trade all day have very limited time and receive insufficient rewards. Even the most experienced intraday traders could lose their money if they trade in an unfavorable time frame for intraday Trading. The question is: What is the best time to trade intraday? The answer is between 9:30 and 10:30 AM.

Should You Trade in the First Fifteen minutes?

Intraday trading is best when the stock market is open for at least two hours. However, the majority of stock exchange trading channels are open at 9:15 in India. Why not open your trading at 9:15 in the morning? Trading within the first fifteen minutes may not pose as great a risk if you're a skilled trader. Beginners should wait until 9:30. This is because stocks will likely react to news from the previous night within the first few minutes of opening.

Trades will often show sharp price movements in one direction. This phenomenon is known as the "dumbmoney phenomenon" because people make their best guesses using old news. Some trades can be profitable for experienced traders within 15 minutes. They often take advantage of very high or low prices and then reverse it in the other direction. The market can appear volatile to novice traders who may not have heard of dumb money or the strategies used by experienced traders to counter it. It is safer to wait until 9:30 than to jump in at 9:15.

Trade at the Opening of the Market

Volatility does not have to be bad. After these first extreme trades, the ideal level of volatility is reached in the market. This makes trading between 9:30 and 10:30 am the best time. There are many advantages to intraday trading within the first few hours after the market opens.

  • - The most volatile hour of the day is the first hour. This gives traders ample time to make the best trades.
  • - The first hour is the best time to access liquidity and get into the market. Liquid stocks have a higher volume, so they will be sold faster.
  • - Stocks bought or sold within the first hour are the most volatile of all trading days. It can provide the best returns when done properly. Incorrectly done, the losses could be devastating.
  • Trades after 11 am are more time-consuming and less frequent. This is a problem for intraday traders who must wrap up their trades by 3:30 pm. It's worth extending the session to 11 AM if you need more time. Day trading is best suited by the strategy of limiting trades to the first hour.

Keep a Bigger Picture in Your Mind

For every trader, the 9:30-10:30 range isn't a strict rule. This range is suitable for beginners but can be modified to suit individual needs. It is important to see the larger picture.

In other words, you should not only choose the best time to trade intraday, but also consider the day of each week. Market traders often prefer Monday afternoon because it is the best time to buy, as historically the market has dropped at the beginning of each trading week. Experts recommend selling Fridays before the Monday-dip.

Not every trader has to spend the first hour of their trading day with activity. A shorter time frame is better for traders who make many trades per trading day. Intraday traders that only trade a few times per day may choose a shorter time frame. It all depends on how active traders are. Experienced traders may also switch their time frames on different days.

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