15 Way to Get Ready for the Stock Market Day
Trader/Investor everyday routine in the before market hours sets the stage for the rest of the trading day. Meeting useful information, selecting fights more carefully, and making the correct moves while your competition is still in fantasy can mean the difference between more profitable session and a losing nightmare.
The very interesting before market activities take place ahead of large economic releases, like Friday's monthly labor report. They also occur after important trend or reversal days, where price surges into the close. Various traders get trapped in these events, and then try to solve themselves previous to the next morning's opening bell.
Investors/Traders have a hard time explain the early news and its final impact on the upcoming session. But the process of before market preparation is not as hard as it seems when you organize your wake-up efforts into best zones of market action. Begin with these 15 Stock Trading Tips and techniques to get ready for the market day.
1. Check CME index futures:
Stop the Nasdaq-100 (NDX) and S&P 500 (SPX) futures and note recent price levels. Then seem at the overnight action, out of marking the lows and highs posted via that period.
2. Review macro forces:
Pic on oil, precious metals and currencies to look how the rest of the world is trading them. Check out Europe and Asia to find out what moved their share market while you were asleep. These hot spots establish important themes for American traders when the stock market intraday gets started with the large Apple.
3. Filter the news flood:
Always focus 1st on news that affects your market open positions. Upgrades, lowers and earnings all trigger volatile spikes that can highest prices well above or fall down closing levels. Then seem at top broker (Tier-1) activities to find out what's hot and what's not.
4. Watch other players:
Lots of broker interfaces let you watch the ECN price action 3 or 4 hours previous to the New York open at 9:30 Am local timing (7:30 IST timing). Use this quiet time to observe how other people are dealing with overnight shocks or big news.
5. Note levels:
Levels of Price that come into play in the before market can turn out to be key pivots during the regular market session. Reversal pivots at this time often secrete big players trying to set boundaries, or get out of extra-large positions. Write down these small numbers and remember them close when the real action gets underway.
6. Watch Resistance- support:
Take note where the stock price moves in the before market, relative to daily resistance or support levels. Specifically, does good news send price above or into obvious resistance? Vice versa, does the bad news fall down price into or via obvious support? Before market move that can't trade via a key barrier often prints the high/low for that day.
7. Seem for Safe Exits:
A trader/investor early birds can find big losing positions or safe exits when shock events hit the newswires. The most excellent escape route comes exactly at 8:00 a.m. (EST) when investors/traders using discount brokers get their 1st quotes of the day. Post a good bid for them to execute previous to they realize that Armageddon has killed the markets.
8. Establish a First Bias:
Always compare the early price action to the previous day's close, and think about who will benefit and who will get trapped from the disequilibrium you are looking at. This fast analysis will help you avoid weak-handed play at the market opening bell.
9. Respect Daily Seasonality:
Daily follow the trend when Monday's before market leans in the similar direction as Friday's close, but fade it when Tuesday's before market tracks Monday's close. Seem for continuation of the market trend on Wednesday & Thursday, followed by a fight of opposing wills as the week draws to an end.
10. Find the Day's Theme:
The many stocks on your screen won't do anything that day, so it's your job to expose the fist of issues ready to move. Triage the list by watching before stock market volume because it shows where other investors/traders are risking their money.
11. Think irrationally:
It doesn't matter if before market news is bad or good. It’s more importantly, how does it, shake up expectations? If you can't figure out for yourself, find the market experts you trust and listen to them.
12. Place Deep Limit Orders:
Order all kinds of limit in the before market session at stock prices where nobody in their right mind will hit them and provide you the bargain of the century. Then sit back on screen and watch these get filled because other traders just have not woken up yet or panic.
13. Have a plan:
Bulls & bears make money, while pigs get killed. If you take a passive approach to the day stock market trading, you set yourself up to get played by other traders. So complete determine,
(a) Who has the upper hand.
(b) How aggressive you want to trade (Buying and selling) after the market opens.
14. Avoid the Crowd:
Traders/Investors chase latest news triggered momentum into before market positions and then get burned in the 1st hour of the regular session. A good strategy is to stand away, let the stock establish an early trading range, and then enter on a range break.
15. Cover Dips and Dell Spikes:
Imaginary groups, such as small Biotechs, can jump large percentages in the pre market, when they report medicine (drug) application news. These spikes often print the daily highs, so use them to take huge profits and wait for reentry at lower prices.