Why We Trade the Market Open

Robert Millar • 25th October 2018

Probably one of the most common misconceptions with trading is that you need to be planted in front of your screens all day to make good money. There was a point in my life where I thought that too. Now I’ve discovered less can be more and guess what? I have more time to enjoy the day as well. 

What to find out more why? Then check out our most recent podcast.

Nowadays, I am hardly at the screens trading. I am done with my profits somewhere within an hour after the market open. That is the ONLY time I trade: The Market Open.

Why do I only focus on the open? Well there are a few reasons which I will outline below but it all really boils down to Volatility/Opportunity, and Freedom/Efficiency.

Increased Volatility and Opportunity

The market open by far is the most volatile time of the day. We focus on trading from 9:30am to 11am EST for the most part.

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This time slot is a period of ‘price discovery.’ It is a period where you will see tons of volume and prices thrown around in stocks as people try to interpret news events and technical moves. Also, the open is where the most amount of traders will be by their desks, increasing volume influxes into the market.

With great volatility comes great opportunity as well. You can see crazy percentage moves in a matter of minutes at the open, giving you tons of opportunities to read price action and bank along the way.

Around lunch time a lot of traders either go to lunch or start working on other things which really takes volume and activity out of the markets. Watch a trading session any given day and you will see this. The most opportunistic time to make money in trading is at the open due to the high volatility there is at that time.

Increased Efficiency

Specific hours provide the greatest opportunity for day trading, so trading only during these hours can help you maximize your efficiency. Trading all day takes up more time than necessary for very little additional reward, and most of the time added risk. In many cases, even professional day traders tend to lose money outside of trading the open.

If you were to stare at the screens all day there is a huge probability that your efficiency will diminish as time goes on. You will start to overwork your ‘trading muscles’, get bored/anxious, and start overtrading or taking setups that are not in your bets interest. Trading less is more…. Always remember that!

Putting all your energy into a short time slot like the open will increase your trading efficiency and discipline, also saving your mental energy along the way.

Increased Freedom

It goes without saying that any job that allows you to make $400-1,000 before 11am EST (my goal is $1-3,000 but you can get there) is going to be one that frees up your life tremendously.

The fact that I can be done trading before lunch time without commuting to an office allows me to work on other ventures, spend time with people, and also spend time on improving myself and my livelihood. Hope to have you part of the community! 

As always please feel free to contact me directly cameron@fous4trading.com. Yes, I answer my emails 😀 

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