Power Hour Stocks: What Are They and How Do You Trade Them?

What are power hour stocks?

The highest activity of traders occurs at the beginning and at the end of the trading day. When is the stock market power hour? It is not necessarily a clearly defined time limited to one hour. But if we must set a timeframe, it is approximately from 9:30 am to 10:30 am EST (from 14:30 to 15:30 GMT+3) and from 3 pm to 4 pm EST (from 22:00 to 23:00 GMT+3).

To understand the power hour, you must keep in mind that the higher the trader activity, the higher the volatility. That’s where you will find your chance to make a profit.

Here is what the activity of traders depends on:

The US stock market opens at 9:30 am EST. This is also when the New York Stock Exchange, the largest financial market, opens. Hundreds of multinational corporate giants follow its lead. After a while, another powerful trading hub, the Chicago Mercantile Exchange, enters trading. When market giants come into play, traders step up, increasing volatility.

Many people prefer to trade in the morning. That way, they finish their business faster and have the whole day at their disposal.

The afternoon activity is due to the fact that all major financial companies, including the stock exchange, are closing for the day. At this time, traders seek to complete transactions and close positions. This creates a surge of activity and volatility in the last hour, between 3 pm and 4 pm EST.

In addition, traders are very active before and right after the weekend, as well as after the release of news about major companies. Don’t forget to check your feed regularly!

Those who are interested in trading outside of regular hours can try after-hours trading.

How to take advantage of power hour stocks

Professional traders like stock market power hours because they are periods of high liquidity and increased trading volume on the market. One of the key components of successful trading is understanding the specifics of trading in different trading sessions. That will allow you to use your time and resources effectively and efficiently.

You can use different strategies to trade during power hours. There are a lot of options, and here are the best to apply during the stock market power hour:

Scalping

Scalping is a relatively popular trading strategy that involves buying and selling a financial asset (stocks, currencies, futures, etc.) several times during the day with a small profit. The main goal of scalpers is not to get a big profit from one position but from several dozen trades.

Day trading

Day trading is trading financial assets for profit within one day. Day traders close their positions on the same day they opened them. They may also make several transactions with the same asset during the day, or for several different assets.

Swing trading

Swing trading is the use of price changes to make a profit. The open position is held for a short period — on average from a few hours to two or three days.

To use the swing movement, you need to have the analytical skills to act flexibly and apply different tactics depending on the circumstances. Learning the strategy takes time and can seem complicated, but the time spent learning the strategy pays off many times over.

How to invest in power hour stocks

There’s one last question left. How do you invest in power hour stocks?

Compared to short-term trading, investing is a long-term process. The period between buying and selling is more than a year. With the right strategy and certain skills, even small investments can lead to great profits.

If you want to make millions on the exchange, stick to the following tips: