Page 456 - THE MARKET WHISPERER
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452 PART 13 - How To Get Ready For Your First Day Of Trading
Take a Rest: the Quiet before the Storm
Intraday trading is a process requiring a great deal of mental energy.
After the first two hours of trading, I tend to feel very tired. To ready myself
for another two hours of rigorous activity, I freshen up, equip myself with
strong coffee, and get back to work.
The Workday Components
The trading day comprises three main sections. We need to understand
how professional traders behave in each of them.
1. Opening
Between 9:30 to 11:30AM, New York time, are the most significant hours
of the trading day. These two hours can be further subdivided into two
parts: the first thirty minutes, and the remaining ninety minutes up until
the lunch break.
The first half hour is typified by high volatility, particularly high
volumes and noticeable difficulty in determining market direction. Our
goal during this timeframe is to establish the trade that should accompany
us throughout most of the trading day.
After this half hour, and for the remaining hour- and-a-half until the
lunch break, market trend is more clarified and traders seek winning trades
which will yield their daily earnings. In these trades, both the quantity of
shares and the target will be relatively high.
2. Lunch Break
Between 11:30 AM to 1:30 PM, New York time, we usually see light volume
since many of the big players,the institutional traders, are out to lunch.The
market is calmer and generally consolidates.
This is a good time to rest, take care of existing trades, realize profits, set
new stops and targets, and prepare trades for the last part of the trading
day. Meanwhile we can trade in small caps. Since they are not traded by
the institutional traders who are on lunch hour, but by the public, these
stocks are not affected by the decreased volumes.
3. Close
The close is from 1:30 to 4:00 PM, New York time. It can also be divided
into two parts:
The first is the trading session following the lunch break, between
