After Hours Trading
A Beginners Guide To After Hours Trading
What is After Hours Trading?
After Hours Trading does not necessarily affect us today with the internet giving us access to the markets 24 hours a day through the week.
Major stock exchanges have business hours of trading from 9.30am – 4.00 pm EST, so these times in general will have the most volume for day traders.
Trading online, we do not have the same hours as the traditional markets, if you want to buy into the market and there is a seller, then your trade will be executed at any time of the day or night.
It is important though for you to know how your broker works during after hours trading, and how your trades will be handled.
You will find that fees and spreads vary during After Hours Trading, and therefore you would need to choose the best broker.
It is not a good idea to use market orders but rather decide where you are going to buy or sell and place your order ahead of time. This is called a limit order.
The Foreign Exchange market (Forex) is open to trade from 5pm EST on a Sunday right through until Friday 4pm
If you are able to trade the Asian session it is a great time to trade as very often a major trend starts during this session.
Usually when there is an opportunity to get into a trend right at the start you can stay in it the whole day. Obviously we don’t know when this is going to happen and sometimes the Asian session hardly moves at all.
What is After Hours Trading?
Typically this is when the market moves in very small increments and there is very little volume. This often happens on the indexes after 4.00pm in the afternoons. This you would call typical After Hours Trading.
Very little volume or liquidity refers to very few orders, or not much buying and selling. When the market has no momentum you often find the scalpers picking up 1 or 2 ticks in the markets. This type of trading is not for a beginner trader, and I would not recommend it.
The professionals with large institutions, such as mutual funds are traders during after hours trading and I think it best to leave this time of trading to the experts, why try and compete with the professionals?.
What is After Hours Trading?
Some market times are:
Emini pre-market trading hours are between 5.00pm and 7.00am EST. Best not to trade during these times.
Forex trading sessions:
New York opens at 8:00 am to 5:00 pm EST
Tokyo opens at 7:00 pm to 4:00 am EST
Sydney opens at 5:00 pm to 2:00 am EST
London opens at 3:00 am to 12:00 noon EST
As you see there are great opportunities to trade any time of day or night on the Forex market. Choose your session to trade and only enter the market when there is momentum.
If you choose to trade the Asian session because the times suit you and you don’t get a trade because of low volatility, then so be it. You don’t trade that day. Learn to understand your trading time and your favorite currency pairs and become an expert in it.
All the currency pairs have their own idiosyncrasies and my advice would be to trade one pair and learn all about that particular pair. The more information you can find on that pair , including daily expert analytical data and advice the better.
Choose one of the major currency pairs as you will find lots of free expert analysts on the net on a daily basis. Your broker will have daily data (usually) as well, and there will also be lots of online resources.
There are just so many markets to trade during the day why would you want to go for After Hours Trading, it really isn’t necessary.
Even if you decide not to trade the Forex market where-ever you live you can find a market to trade during the day.
Germany has the DAX for instance. Another market to study and learn the characteristics of.
UK has the FTSE.
Every market has its own individuality.