The time period between 9:30am and 10:30am EST is often the best time of day to trade stocks. Especially for day trading. First thing in the morning, precisely the first 15 minutes, market volume and prices can and do go wild. People are making trades based on the news. Power hour between 3:00pm – 4pm is also a very popular time. 

9:30am est to 11:00am est is the best time of day to buy stocks because that’s when the market is most liquid. During lunch time hours, you’re up against HFC’s or high frequency computers, which is the most difficult time to trade due to lack of liquidity. 

Sometimes less is more when it comes to the world of trading. Did you know that to successfully day trade, you don’t need to be glued to your computer all day?

The reality is if you trade all day you’ll most likely blow up your account. Sometimes all you need to devote is one hour, perhaps three and that’s stretching it.

Buyers and Sellers

The stock market is a tug of war between buyers and sellers. As a result, price fluctuates. There are three things you need in order to have good trades; price action, volume and volatility. 

That doesn’t mean, however, that you should trade for 8 hours a day. Many times when we think of trading for a living, we think it has to be a typical 9-5 job.

However, that’s not the case. In fact, less is more when it comes to trading. 

Market Open

Trading at the open creates sharp movements in price. In other words, volatility is at its peak, and this volatility means opportunity. This means it’s the best time of day to buy stocks.

For seasoned traders, the first 15 minutes of market open are their bread and butter. With stocks overextended in either direction, they take advantage of this opportunity and strike fast.

However, if you’re a new trader, I highly recommend steering clear of the first hour until you’re comfortable with identifying patterns and trends.

Middle of the Day

Fast forward to 11:30 AM; this is where we see volatility and volume tapering off. When this happens, the moves and patterns are slower to play out with less volume.

Typically, the middle of the day is the calmest and most stable. After the morning news is released, the market responds, and traders wait to see where the market may go for the rest of the day.

Will it trend sideways? What about trending to the downside? Will it trend up? As a new trader, it’s an excellent time to place trades as prices are relatively stable, which translates to slightly more predictable returns. 

Stock scanners can also be helpful during this time if price action is really slow. Remember that the best time of day to trade stocks is the morning unless you like slow and steady. 

It is slow though. As a result, it can be like watching paint dry. You’ve heard the saying “a watched pot never boils”. It’s the same with trading in the middle of the day.

Trading During the Last Hour of the Day

A common phenomenon you’ll see when you start to trade is that in the last hours of the trading day, volatility and volume starts to increase again. This is known as the power hour. The is the second best time of day to buy stocks.

During the period from 2:00 PM on, we start to see sharp reversals and more significant price moves. Like the first hour, traders jump in, buying or selling based on what has happened so far that day.

Typically traders are trying to close out their positions, maybe shorts are getting squeezed out, or traders are trying to enter a late-day rally.

The last several minutes of trading can be particularly active, with big moves on high volume. You can use late-day trading to your advantage if you’re unable to capture the morning moves. Which is on the best time of day to trade stocks list.

Months and Days

Let’s take a step back and take a birds-eye view of the market. The best time of day to trade stocks can and does include days and months.

Typically, Monday afternoon is usually a good time.  Historically, the market tends to drop at the beginning of the week, particularly around the middle of the month. This so-called “Monday Effect” has been researched extensively. 

Because of this, many experts recommend selling on Friday before the Monday Effect dip occurs. More specifically if that Friday is the first day of a new month or when it precedes a three-day weekend.

Likewise, prices tend to drop in September and then go up again a month later. October is generally positive overall, and prices often go up again in January, particularly for value and small-cap stocks. 

Day Trading Stocks

• No post would be complete without talking about some of my favorite stocks to day trade. These are all large cap stocks for me that are:
• Over a million shares traded daily on average
• An ATR of at least 1 ( I need to be able to scalp at least a .50 cents from the stock
• Good fundamentals. I check them in StockRover – I want investors to have a REASON to buy.  
• Tight bid v ask spreads for the shares OR options
• The Best Day Trading Stocks for me are: $AMD $AAPL $MSFT $FB $SHOP $SPY $QQQ $JPM

Key Take Aways

• Let’s take a look at some things we’ve learned about the best time of day to trade stocks.
• The first hour or more specifically, the first 15-minutes is the most volatile trading time. 
• New traders should steer clear of the first 15-minutes until they have enough practice in a simulator
• The middle of the day is the calmest and most stable time to trade
• Volatility and momentum tends to pick up again from 2 PM on

Bottom Line

One hard and fast rule is that the first and last hour of a trading day is the busiest; offering the most opportunities.

That said, please don’t jump in and start trading the first 15 minutes; becoming a day trader takes time and dedication. Learning professional-grade trading skills can have a life-changing effect.