The cryptocurrency market operates 24 hours a day, 7 days a week. At any time a trader can buy or sell an asset. However, this is not the case in the stock market. Let’s look at the differences and when it is better to trade the stock markе assets.
A trading session is a time when the stock exchange is open. Trading sessions are not held on Saturday and Sunday, as well as on US national holidays.
Unlike the cryptocurrency market, the US stock market has its hours of operation.
There are two major stock exchanges in the States: the NYSE and NASDAQ.
The trading session is divided into:
- Premarket — NASDAQ from 07:00 to 9:30 New York. NYSE from 04:00 to 9:30 New York time.
- The main trading session is from 9:30 to 16:00 New York time for both exchanges.
- Postmarket — NASDAQ from 4:00 p.m. to 8:00 p.m. New York time. NYSE from 4:00 p.m. to 11:00 p.m. New York time.
Premarket
Allows traders to buy shares before the main session opens in a special trading auction. The premarket is a great way to buy or sell an asset at a favorable price. But there are disadvantages to the premarket. These are:
- Spread. At the premarket, the spread is wide. A widespread is dangerous because it is more difficult to get out of a position at a favorable price.
- Volume. At the premarket for a long time there is simply no necessary trading volume. If you hit a bid or ask, you can lose a significant amount of capital.
- Volatility. Due to the lack of volume, the price on the premarket can fall and rise very quickly.
- Market orders do not work on the premarket. You also need to use limit stops, which may not be executed. This is inconvenient for short-term traders. You need to have fast reactions to trade on the premarket.
On NASDAQ, the pre-market opens at 7 a.m. and lasts until 9:30 a.m. New York time. In turn, NYSE opens the pre-market at 4 a.m. and also lasts until 9:30 a.m. New York time.
Main trading session
This is the ideal time to open a position.
The US stock market opens at 9:30 and closes at 16:00 New York time.
The best time to trade is when the market opens at 9:30 a.m. New York time. It is at this moment that the stock market is experiencing major price movements. Intraday and mid-term traders are most eager to open positions. Such “excitement” lasts till about 11:00 – 12:00 New York time. After that there comes a “calm”, most of the market participants have a rest. That’s why volumes and volatility are falling down till the evening.
From 15:30 New York time, it becomes hot and assets change in price noticeably due to the excess of orders.
During the main trading session, traders have at their disposal all possible orders and their instant execution.
Postmarket
The time after the close of the main trading session is the postmarket. Postmarket on NASDAQ starts from 16:00 to 20:00 New York time, and NYSE from 16:00 to 23:00 New York time. All the disadvantages of the pre-market apply to the post-market as well. In contrast to the pre-market, at the post-market, the volume is even less and the spread is even wider. Imbalance-based strategies are also not applied. After the market closing deals rarely take place.
Conclusion
The stock market has its trading sessions. The most successful hours for trading are during the main session, which starts at 9:30 and ends at 16:00 in New York. This is the time when traders have the best trades due to high volume and narrow spread. Successful pre-market and post-market trading requires a lot of experience and skill. Beginners should start their trading during the main trading session. This is exactly what trading is available on Movo.
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